Industry Confidence Index Drops to 51.90 in December, Ministry of Industry: A Familiar Pattern at the End of the Year

JAKARTA - The Ministry of Industry (Kemenperin) recorded that the industrial confidence index (IKI) in December 2025 reached 51.90. The figure fell 1.55 points from the IKI in November 2025 which was recorded at 53.45.

"IKI December 2025 was recorded at 51.90, this figure fell by 1.55 points compared to the achievement of November 2025 at 53.45 and lower by 1.03 points compared to IKI December 2024 which was 52.93," said the spokesperson for the Ministry of Industry Febri Hendri Antoni Arif quoted from a written statement, Wednesday, December 31.

According to Febri, the weakening of IKI in December is a common pattern that occurs at the end of the year.

"This condition reflects the cautious attitude of industry players in responding to global external pressures and seasonal factors at the end of the year," he said.

Febri added that in December, there were 17 subsectors that experienced expansion. The contribution of these 17 subsectors to gross domestic product (GDP) was 79.4 percent.

In other words, the IKI subsectors with an expansive status are the subsectors that contribute significantly to GDP.

The two subsectors with the highest IKI value are the pharmaceutical industry, chemical and traditional medicine products (KBLI 21) and other processing industries (KBLI 32).

Meanwhile, said Febri, there are six subsectors that have contracted, including the wood and wood products industry (KBLI 16); rubber and plastic industry (KBLI 22); basic metal industry (KBLI 24); metal goods industry (KBLI 25); computer, electronic and optical goods industry (KBLI 26); and other transportation equipment industry (KBLI 30).

He said the largest decline occurred in the other transportation equipment industry sub-sector. This was due to the weakening of domestic motorcycle sales in November 2025 which fell 11.31 percent on a monthly basis (mtm) to 523,591 units, as well as a decrease in motorcycle exports in Completely Built Up (CBU) by 11.39 percent and Completely Knocked Down (CKD by 14.86 percent.

"Similar decreases have historically occurred every December," said Febri.

The contraction in the wood and wood products industry sub-sector was due to the limited availability of raw materials due to natural disasters in Sumatra, logistical disruptions, and global market uncertainties, including dumping investigations in the United States and India's certification policy.

The decline in IKI in a certain period throughout 2025 was also influenced by the increasing pressure of imported products in the domestic market which had an impact on weakening the demand for the manufacturing industry, especially for finished products.

"This condition has a direct implication on the order variable which has the largest weight in the formation of IKI," he explained.

Therefore, the Ministry of Industry is trying to maintain the sustainability of the expansion of the manufacturing industry through strengthening the domestic market, increasing the use of domestic products, protecting industries from unhealthy trade practices, and ensuring the availability of competitive energy and raw materials.

"The government will continue to monitor the impact of global policies and strengthen coordination across ministries and agencies to maintain the competitiveness of national industries," explained Febri.

In addition, it is optimistic that business actors regarding their business conditions in the next 6 months still show a trend of increasing optimism in the last six months, namely 71.8 percent.

The figure rose 0.8 percent compared to the previous month's percentage.

"Meanwhile, pessimism decreased to 4.7 percent, reflecting the belief that year-end pressures are temporary and optimistic that the processing industry sector will remain the engine of the economy and be ready to enter 2026 with better prospects," he added.