Spokesperson For The Ministry Of Industry: Manufacturing Sector Activity Continues To Improve, Performance Increases By 7.78 Percent

JAKARTA - The Ministry of Industry (Kemenperin) continues to spur the expansion of the national industrial market in the midst of Indonesia's Manufacturing Purchasing Managers' Index (PMI) which is still at an expansive level even though it contracted to 50.2 in June 2022 from 50.8 points in the previous month.

"This condition is also supported by the export performance of the manufacturing sector which reached 14.14 billion US dollars in May 2022, up 7.78 percent from the previous April," said Ministry of Industry Spokesperson Febri Hendri Antoni Arif in a written statement quoted by Antara. in Jakarta, Sunday.

He said that based on the S&P Global report, manufacturing sector activity continued to improve, with demand volumes continuing to grow.

"Although it cannot be denied, the slowdown in Indonesia's Manufacturing PMI in June 2022 was influenced by the increase in raw material prices which affected output prices. This slowdown was also experienced by other ASEAN countries," said Febri.

Until now, the condition of raw material prices is still influenced by world geopolitical conditions and energy scarcity. This situation may continue with a number of countries starting to restrict commodity exports. This needs to be observed in order to determine policies related to this situation.

Therefore, the Ministry of Industry continues to strive to maintain the competitiveness of the national industry and encourage the formation of public demand. One of the steps taken, for example, was to facilitate a meeting between small and medium-sized industries (IKM) of automotive components and automotive principals from Japan during the visit of the Minister of Industry (Menperin) Agus Gumiwang Kartasasmita to Sakura earlier this week.

This activity aims to explore opportunities for IKM players to become part of the supply chain for Japanese car components, including in other countries that are also the investment destination of the automotive company.

On that occasion, the Minister of Industry also encouraged investors, including those from the chemical industry sub-sector and the flavors and fragrances industry, to expand downstream and product diversification in Indonesia, which at the same time was able to strengthen the structure of the national industry.

In addition, the Ministry of Industry is committed to providing the facilities needed by the manufacturing industry to maximize their utilization and increase competitiveness in order to expand the export market. "This will also support the import substitution program of up to 35 percent launched by the Ministry of Industry," said Febri.

The global S&P report stated that optimism across Indonesia's manufacturing sector was again seen in June. Most respondents responded to the expectation of continued economic improvement and strengthening demand because it increased confidence. Nevertheless, the overall level of positive sentiment eased to a four-month low.

S&P Global Market Intelligence economist Lara Denman said price pressures continued as companies chose to share more of the burden of raw material costs with clients. Rising prices are also still a risk of slowing growth.