Exceeding National Economic Growth, ILMATE Industry Reaches 10 Percent In The Third Quarter Of 2023

The Ministry of Industry (Kemenperin) noted that the performance of the metal, engine, transportation and electronic industries (ILMATE) grew by 10 percent in the third quarter of 2023.

This sector recorded growth of IDR 159.41 trillion.

The Director General of ILMATE at the Ministry of Industry, Taufiek Bawazier, said that this industry was recorded as the most significant contributor to the performance of the manufacturing industry and the national economy. In fact, it is increasingly active in the midst of unstable global economic conditions.

"This positive achievement proves that the policies we have implemented so far, such as green mobility, downstreaming, and smart supply demand are already on the right track so as to boost the growth of the manufacturing industry," said Taufiek in a written statement received by VOI, Friday, November 10.

Taufiek assessed, with a growth of 10 percent, the ILMATE industry was able to surpass national economic growth by 4.94 percent in the same period.

The double digit growth in this sector has occurred since the third quarter of 2022.

Several ILMATE sub-sectors that played an important role in the formation of Gross Domestic Product (GDP) in the third quarter of 2023, including the basic metal industry, the metal, computer, electronic goods, optical and electrical equipment industries, the machinery industry, and the transportation equipment industry.

In the base metal industry, namely steel, there has been an increase in national demand to support construction development in the capital city of Nusantara (IKN) and the development of domestic electric vehicles.

These two things trigger the growth of the basic metal industry which reaches 10.86 percent on an annual basis or year on year (yoy).

"In addition, the increase in export demand for basic metal products nickelONE and ferronickel is also one of the causes of the growth of the basic metal industry," said Taufiek.

Moreover, the downstream program has triggered the growth of provincial GDRB per capita for nickel-producing areas, such as North Maluku, Central Sulawesi, and Southeast Sulawesi, which have proven to experience economic growth far above the national average since 2018.

When viewed from export-import data, the export value of the basic metal industry sector in the third quarter of 2023 reached 10.50 billion US dollars, an increase of 1.72 percent (yoy), while the import value was around 4.89 billion US dollars.

"This has resulted in a trade balance surplus of up to 5.61 billion US dollars. Positive growth in this sector is in line with policy improvements at the Ministry of Industry regarding the national steel supply-demand smart mechanism," he said.

Next, the metal, computer, electronic goods, optics, and electrical equipment industries grew by 13.68 percent (yoy).

The increase in sectors was due to a surge in demand from the construction sector which resulted in an increase in the production of metal goods in West Java, Banten and East Java Provinces.

"This is an achievement, in which the industry of metal goods, computers, electronic goods, optics, and electrical equipment in the 2017-2020 period grew no more than 4.5 percent every quarter and tends to be negative, now it can reach 13.68 percent," said Taufiek.

Meanwhile, the performance of the transportation industry is up to 7.31 percent (yoy) in the third quarter of 2023.

This is driven by an increase in domestic and foreign demand in the automotive industry, especially the increase in motorcycle production.

Then the machining industry was able to grow by 1.86 percent (yoy) in the third quarter of 2023, which in the previous period had contracted by 0.02 percent.

The strengthening performance of the industrial machinery is supported by increased production of heavy equipment, especially the hydroulic excavator types in West Java, DKI Jakarta, and Banten Provinces.

"We are optimistic that the performance of this brilliant growth in the ILMATE sector can spur increased investment and competitiveness, including the export performance of ILMATE commodities," he added.