Dominant And Soaring Contributions, Manufacturing Industry Is Still Confident

JAKARTA - The growth performance of the non-oil and gas processing industry in the first quarter of 2023 grew by 4.67 percent (yoy). The manufacturing sector is still a major source for the formation of the national gross domestic product (GDP) structure during the first three months of this year, which reached 5.03 percent.

"The manufacturing industry sector remains the largest contributor to supporting national economic growth in the first quarter of 2023, which is 16.77 percent, or an increase compared to the previous period (in the fourth quarter of 2022) of 16.39 percent," said Minister of Industry (Menperin) Agus Gumiwang Kartasasmita in Jakarta, on Friday, May 5.

Minister of Industry Agus said, in two consecutive quarters, the food and beverage industry was able to grow above economic growth. Given that the GDP structure of the non-oil and gas processing industry is dominated by the contribution of the food and beverage industry which reaches 38.6 percent, this industry is a prime mover of growth in the first quarter of 2023.

In addition, in the first quarter of 2023, the transportation equipment industry also showed the highest growth of 17.3 percent, followed by the basic metal industry (15.5 percent), as well as the metal goods industry, computers, electronic goods, optics and electrical equipment (12.8 percent).

"The growth of the transportation equipment industry has grown significantly because it is driven by increased vehicle production to meet demand for new vehicles ahead of Lebaran 2023, as well as increased production of electric vehicles," said Agus.

Meanwhile, the soaring growth in the basic metal industry was driven by a surge in foreign demand, especially nickel ore processed products such as nickel ferro, nickel safe, and nickel pig iron.

"This is in line with the government's priority program in implementing industrial downstream policies to increase the added value of domestic raw materials that have a wide multiplier effect for the national economy," he said.

Minister Agus is even optimistic that manufacturing industry players in Indonesia still have high confidence in running their business. This is because it is supported by the government's determination to create a conducive business climate by issuing various strategic programs and policies.

Even though it is overshadowed by uncertain global conditions, it can be seen that the indicators in the Industrial Trust Index (IKI) and the Indonesian Manufacturing Purchasing Managers Index (PMI) released by S&P Global last April show an expansion level.

"Since the Ministry of Industry launched IKI last November and for 20 consecutive months our manufacturing PMI has remained both in the expansion phase," he said.

Indonesia's Manufacturing PMI in April was in the position of 52.7 or a significant increase compared to March's achievement at the level of 51.9. The improvement in business conditions was supported by increasing domestic demand.

"This is in line with IKI in April which was previously released by the Ministry of Industry, which was recorded at 51.38," he concluded.