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JAKARTA - The Ministry of Industry noted that the Industrial Trust Index (IKI) in May 2023 remained at an expansive level. The achievement was 50.9 or decreased by 0.48 compared to April which was 51.38.

"IKI May 2023 has reached 50.9. It remains an expansion, although it has slowed down by 0.48 points compared to April 2023," said Ministry of Industry spokesman Febri Hendri Antoni Arif when delivering the release of IKI May 2023 in Jakarta, on Wednesday, May 31.

Febri said that the slowdown in the value of IKI was due to 11 of the 23 sub-sectors of the processing industry experiencing a decrease in the value of IKI, with a GDP share of 29.4 percent, namely the textile industry, the basic metal industry and the tobacco products industry (IHT).

"As a result, the share of expansion sub-sectors for the GDP of the first quarter of the Non-Oil and Gas Processing Industry in 2023 decreased to 70.6 percent. The share comes from 12 sub-sectors experiencing expansion," he said.

Furthermore, said Febri, the decline in IKI in May was partly due to the contraction of two manufacturing sub-sectors, which often became the mainstay of IKI's expansionary score every month.

"The decline in IKI is due to several sub-sectors that have large GDP shares experiencing contractions, after previously experiencing contractions are the basic metal industry, the tobacco processing industry," he said.

In addition, Febri assessed that the slowdown in the IKI score was also supported by the sloping of the manufacturing industry's export sector. "The second cause of the decline in exports is due to the decline in commodity prices and includes a decrease or change in the exchange rate," he explained.

On the other hand, the stock of supplies in the warehouses of manufacturing industry factories is also still piling up due to a decrease in purchasing power last April or during the 2023 Eid period.

In terms of variable factors forming IKI, product production and inventory variables experienced expansion in May 2023, while new order variables contracted.

"Domestic messaging is the dominant factor affecting the new messaging variable index, and orders are the dominant factors affecting product production and willingness factors," concluded Febri.

For your information, the index is compiled from data and information from manufacturing companies spread over 23 types of industrial sub-sectors based on KBLI 2 digits.

The Ministry of Industry collects data and information online, which includes the development of industrial activities, the development of new order volume, development of production volume, development of product inventory volume, and business prospects in the next six months.


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