Industrial Confidence Index Drops 0.71 Percent In September 2023

JAKARTA - The Ministry of Industry (Kemenperin) noted that the Industrial Trust Index (IKI) in September was at 52.51 points.

This position decreased by 0.71 points from the position in August which was recorded at 53.22 points.

Spokesperson for the Ministry of Industry (Kemenperin), Febri Hendri Antoni Arif said, although it was 0.71 points slow, IKI in September was still in an expansive phase.

"September 2023 reached 52.51, still expanding despite slowing down 0.71 points compared to August 2023," Febri said in a September release of the IKI assessment, at the Ministry of Industry, Jakarta, Friday, September 29.

Febri explained that the decline in IKI value was due to an increase in product inventory in almost all manufacturing sub-sectors. This condition shows that production in September has not been absorbed in the market, both export and domestic.

In addition, Febri explained that the large number of imported goods circulating domestically contributed to the decline in IKI in the past three months.

"Especially for sectors whose IKI has contracted, such as the textile industry and textile products, and the ceramic industry," he said.

Judging from the IKI-forming variables, the new order variables recorded an increase to 53.56 from 53.22 and the production variables rose to 54.17 from 54.13. The decrease in index value occurred in product inventory variables from 51.85 to 47.40.

However, said Febri, in general, industrial confidence in September 2023 was still stable. A total of 44.8 percent of business actors stated that their business conditions this month remained or were stable.

As for the 23 sunsectors, 17 industrial sub-sectors are still expanding with a contribution of 88.2 percent to the GDP share of the non-oil and gas processing industry in the second quarter of 2023.

The basic metal industry sub-sector experienced an increase in IKI value and changed from contraction to expansion this month. Fulfillment of demand for IKN development is thought to have boosted the performance of the basic metal industry," he said.

Febri explained, this September, there were six sub-sectors with IKI values contracting and contributing 11.8 percent to the GDP share of the non-oil and gas processing industry in the second quarter of 2023.

Subsectors that contracted this September are the Textile Industry; Soaring Clothing Industry; Wood, Kayu and Gabus Goods industry, Non-Mealth Galiran Industry; Furniture Industry and Other Processing Industries.

"For the non-metallic Galiards Industry, the contraction was caused by a decrease in the production of the glass and ceramic industry, while the cement industry has reportedly experienced an increase in production," he explained.

Febri said, although it is still an expansion and most business actors are still optimistic about the condition in the next six months, the level of pessimism of business actors is quite worrying this September.

"Business actors who expressed pessimism increased by 2.4 percent, namely by 11.6 percent added Febri. This is due to uncertainty in the global market. In addition, the increase in energy prices has also increased the level of pessimism of business actors," he explained.