Industrial Confidence Index Rises To 52.32 In November 2023

Manufacturing industry (photo: dock. Antara)

JAKARTA - The Ministry of Industry (Kemenperin) reported that the industrial confidence index (IKI) in November 2023 was at 52.43 points.

This position increased by 1.73 points from the October position which was recorded at 50.70.

"IKI in November 2023 is at an expansion level, reaching 52.43 or an increase of 1.73 points compared to October 2023 which amounted to 50.70," said Spokesperson for the Ministry of Industry (Kemenperin) Febri Hendri Antoni Arif in a November release of the IKI assessment at the Ministry of Industry, Jakarta, Thursday, November 30.

Febri said, based on its constituent components, the expansion of the manufacturing industry's confidence index was caused by new order variables and production which continued to expand by 54.85 and 54.50.

Meanwhile, product inventory variables are still contracting by 43.29 or down 4.66 points, which can be interpreted as that there are still many industrial products in warehouses. The share of IKI sub-sectors that experienced an expansion of GDP for the non-oil and gas processing industry in the third quarter of 2023 was 91.1 percent.

The Ministry of Industry noted that there are a number of industrial sub-sectors that are experiencing expansion, such as the food and beverage industry, tobacco processing industry, finished clothing industry, skin industry, leather goods, and footwear.

Meanwhile, a number of industrial sub-sectors that experienced contraction include the textile industry, the wood industry, wood and concerns, the computer industry, electronic goods and optics, the electric equipment industry, other processing industries, as well as the repair industry, the installation of machines and equipment.

"So, the sub-sector that experienced expansion in November 2023 was a large sub-sector. That explains why IKI rose quite high," said Febri.

According to Febri, the value of IKI in November 2023 should be higher if the Certain Natural Gas Price (HGBT) program goes well. In addition, controlling imports and law enforcement on illegal imported products also needs to be effective.

"Therefore, it is necessary to strengthen coordination and synergy across ministries and institutions as a follow-up," he said.

The value of IKI, which expanded in November 2023, is in line with the percentage of business actors who stated that the condition of their business activities had increased to 31.9 percent or higher than the conditions in October 2023, which was 30.2 percent.

"Business actors who stated that their business conditions had increased higher than those that stated that their business conditions had decreased by 21.2 percent in November 2023," said Febri.

In November 2023, in general, the level of optimism for business actors views that business conditions over the next 6 months will increase to 61.4 percent compared to the previous month, which was 61.0 percent.

The majority of respondents who answered were optimistic that their confidence in market conditions would improve and trust it because of the central government's better policies.

Furthermore, 26.7 percent of business actors stated that their business conditions were stable for the next 6 months. This figure has not changed significantly from the previous months.

Finally, the percentage of pessimism of the views of business actors on business conditions in the next 6 months is 11.9 percent or lower than the previous month of 14.0 percent.