Industry Confidence Index Drops Slightly To 51.32 In December 2023, But Still Expansion

Spokesperson for the Ministry of Industry Febri Hendri Antoni Arif. (Photo: Theresia Agatha/VOI)

JAKARTA - The Ministry of Industry (Kemenperin) reported that the industrial confidence index (IKI) in December 2023 was at 51.32 points.

This position weakened 1.11 points compared to November 2023 which was recorded at 52.43.

"IKI in December 2023 was at an expansion level, reaching 51.32 or weakening 1.11 points compared to November 2023 which was 52.43. However, this value increased by 0.42 points compared to the value of IKI in December last year which was 50.90," said Ministry of Industry spokesman Febri Hendri Antoni Arif in a December assessment release monitored online, Thursday, December 28.

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 53.44 and 53.86.

Meanwhile, product inventory variables are still contracting by 42.21, which can be interpreted as an increase in product stock 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 86.3 percent.

Febri said the conditions presented had caused 8 sub-sectors to contract with a contribution to GDP of 13.7 percent.

"For 8 sub-sectors that have contracted with 13 percent share, there are the computer industry, textiles, other processing, rubber as well as rubber and plastic goods, machinery and equipment, printing, wood and envelopes, non-metal coins," he said.

Even so, Febri said there were still 15 sub-sectors of the manufacturing industry that experienced an expansion with a share of GDP of 86.3 percent.

The four of the 15 sub-sectors that experienced this expansion included the food industry, motorized transportation trailers, drinks, and the tobacco processing industry.

"The large sub-sector, such as IKI food and beverages, is always good, almost almost 60, the IKI trailer motor vehicle is quite good, then the beverage industry, and the tobacco processing industry," said Febri.

The value of IKI, which expanded in December 2023, is in line with the percentage of business actors who stated that the condition of their business activities increased to 31.8 percent and stabilized to 46.8 percent compared to the previous month of 31.9 percent and 46.9 percent.

"Business actors who stated that their business conditions had increased higher than those that stated that their business conditions had decreased by 21.4 percent in December 2023," he explained.

In December 2023, in general, the optimistic level of business actors views that business conditions over the next 6 months will increase to 62.4 percent compared to 61.4 percent in November 2023.

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

Furthermore, 24.7 percent of business actors stated that their business conditions were stable for the next 6 months. This figure decreased from the previous month of 26.7 percent.

Finally, the percentage of pessimism of the views of business actors on business conditions in the next 6 months is 12.9 percent.