Indonesian Manufacturing Drops Again, Ministry Of Industry Calls Trump's Policy The Cause Of Kerok

Illustration. (Photo: Doc. Antara)

JAKARTA - The Ministry of Industry (Kemenperin) responded to the latest data from the Indonesian manufacturing Purchasing Managers' Index (PMI) in May 2025. The data released by S&P Global today, Monday, June 2, 2025, shows that PMI RI has contracted again.

It is noted that Indonesia's manufacturing PMI is at level 47.4. Meanwhile, if the index is below 50, it means that the manufacturing condition is weakening, aka contracting. In April 2025, Indonesia's manufacturing contracted, with PMI at the level of 46.7. Indeed, there was a slight index improvement in a month.

Related to this, Ministry of Industry Spokesperson Febri Hendri Antoni Arif admitted that the domestic manufacturing industry is still experiencing pressure amid the dynamics of the global economy. Plus, the flood of imports of finished products in the domestic market.

The policy of the President of the United States (US) Donald Trump, which applies a new tariff on imported goods, is believed to have added to the burden.

"The survey results show a new order decline in May. The decline in orders is due to sluggish market demand, including those who want to penetrate the export market, especially to the United States due to the impact of Trump's tariffs," Febri said in an official statement, Monday, June 2.

"Export shipments also experience problems because it is difficult to get ships as a means of logistics transportation and bad weather influence," he added.

In addition, the slowdown in the performance of the manufacturing industry is also due to the drop in production volume, one of which is due to the increase in raw material prices.

"This is what makes our industry powerless to compete with competitors, because the selling price of competitors also does not increase, efficiency occurs," he said.

However, amid the bad news, Febri highlighted S&P Global data which states that industry players are still confident in the midst of the current difficult times.

He quoted S&P Global as saying that the Indonesian manufacturing company assessed that this condition would pass as soon as possible and the industry's performance would return to growth.

The confidence of industry players can be seen from the efforts of those who are still committed to increasing the number of workers.

In fact, said Febri, the increase in the number of workers has occurred over the past six months to prepare conditions for demand to recover.

As for the first quarter of 2025, it was recorded that the number of industrial companies reporting was in the process of building production facilities reaching 359 companies, with labor absorption of 97,898 people.

According to Febri, the company that built the production facility in the first quarter is proof that there is high optimism in terms of labor absorption in Indonesia.

"This figure is higher than the number of Termination of Work Relations (PHK) in all sectors, including the manufacturing industry that was conveyed by other parties to the public," said Febri.

"Please understand that we empathize with industrial companies that are closing and also empathizing with workers affected by layoffs," he continued.

Furthermore, Febri assessed that the submission of labor absorption data was not because it did not care about the closure of several industrial companies or workers who experienced layoffs in various sectors.

"But as a form of our optimism for the performance of the national manufacturing industry going forward," he concluded.