Industry Confidence Index May 2024 Increases To 52.50, Tobacco Sector Decreases

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

JAKARTA - The Ministry of Industry noted that the industrial confidence index (IKI) in May 2024 was at 52.50.

Spokesperson for the Ministry of Industry Febri Hendri Antoni Arif said, IKI in May 2024 rose 0.20 points compared to April 2024, which was 52.30.

"IKI in May 2024 reached 52.50 or an increase of 0.20 points. So, it increased slightly," said Febri in the release of IKI May 2024 which was monitored online, Thursday, May 30.

Febri said that in May 2024, IKI recorded an increase of 1.60 points compared to IKI in May last year. He said, of the 23 sub-sectors surveyed, 22 sub-sectors experienced expansion and only 1 contraction sub-sector, namely the tobacco processing industry.

"The GDP share of the 22 sub-sectors is 95.8 percent. This means that all sub-sectors of the non-oil and gas processing industry are being active," he said.

"But one contraction sub-sector, namely the GDP share, is 4.2 percent of the tobacco processing industry," he continued.

He explained that the contraction of the tobacco processing industry only occurred in May this year since IKI was released in November 2022. The reason is the decrease in components on the production side due to the circulation of illegal cigarettes.

"We convey that the contraction in the tobacco processing industry has only occurred in the calculation of IKI in May 2024. This is due to a decrease in components on the production side. We get information from the tobacco products industry (IHT) that reduces tobacco production due to the circulation of illegal cigarettes in the market, especially from outside Indonesia," said Febri.

Therefore, the Ministry of Industry asks for the circulation of illegal cigarettes to be suppressed because it has an impact on the production of the tobacco processing industry. On the same occasion, he explained other sub-sectors that experienced expansion in May, but previously had contractions and suffered.

One of them is the textile industry which has been expanding since April 2024.

This means that the industry has started a lot of production and orders, both from the domestic market and exports.

"We from the Ministry of Industry together with textile associations and other TPT associations will continue to monitor finished clothing products or textiles that leave ports, including yesterday's container buildup. We will monitor how the market is circulating and its impact on the production of the textile industry and finished clothing," said Febri.

Regarding IKI in May 2024, said Febri, when viewed from the variables forming IKI, there is an increase in the value of IKI coming from the increasing value of the new order variable IKI, which is 1.23 points.

So that the value of IKI new orders increased to 53.16.

The value of IKI product inventory variables also increased by 0.57 points to 54.59.

In contrast to other variable IKI values, production variables actually experienced a decrease in expansion by 1.75 points to 50.01.

In May 2024, it is optimistic that business actors will increase their business conditions in the next 6 months to 73.5 percent compared to 72.7 percent in April 2024.

This value is the highest optimistic since IKI was released.

In fact, all respondents to the paper industry business and paper and repair and installing machines/alats answered optimistically.

Furthermore, as many as 20.8 percent of business actors stated that their business conditions were stable for the next 6 months. This figure decreased compared to the figure in the previous month.

The percentage of pessimism of the views of business actors on business conditions in the next 6 months is 5.7 percent or a decrease compared to April 2024 of 6.3 percent.

This value is the lowest pessimistic since IKI was released.