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Industrial Confidence Index Rises To 52.95 In November 2024
Thursday, 28 Nov 2024
The Ministry of Industry (Kemenperin) has reported an increase in the Industrial Confidence Index (IKI) for November 2024, rising by 0.20 points to reach 52.95, which is higher than the previous month's level of 52.75. Kemenperin spokesperson Febri Hendri Antoni Arif stated that this achievement reflects an ongoing expansion in industrial performance. When compared to the IKI from November of the previous year, there has been an increase of 0.52 points.
"The rise in the IKI for October is supported by the expansion of 21 subsectors, contributing 99.3% to the non-oil and gas manufacturing sector's GDP in the second quarter of 2024," Febri mentioned in a press release on Thursday, November 28, 2024. He detailed that the increase in the IKI for November is bolstered by a rise in the new orders index, which increased by 2.58 points to 54.2, and an expansion in the inventory index, which stands at 54.68, despite a decrease of 1.18 points from the previous month.
However, the production index for this month remains in contraction, falling below 50 after two consecutive months of expansion. The production index has slowed by 2.84 points compared to the previous month, now at 49.72. According to Febri, this decline is attributed to the strengthening of the US dollar against the rupiah, leading to increased prices for imported raw materials, while producers sell their products in rupiah.
On the other hand, the increase in the IKI is also seen as a response from the domestic industry to the new government programs under President Prabowo Subianto, such as industrial downstreaming and free nutritious meals. Meanwhile, the export industry continues to face weakened demand. The current IKI value is supported by improvements in three subsectors with the highest values, namely the electrical equipment industry, the beverage industry, and the printing and reproduction media industry.
The completion of PLN projects by the end of the year, along with the enhancement of battery charger procurement for Public Electric Vehicle Charging Stations (SPKLU), is believed to have contributed to the improved performance of the electrical equipment industry, as stated.
However, two subsectors have experienced contraction: Other Manufacturing Industries and Repair and Installation of Machinery and Equipment. The Other Manufacturing Industries are primarily characterized by export products such as false eyelashes, jewelry, children's toys, sports equipment, and musical instruments, which have seen a decline in exports due to the economic slowdown in the destination countries.
Meanwhile, the contraction in the Repair and Installation of Machinery and Equipment subsector is thought to be a result of decreased domestic demand, stemming from increased efficiency measures implemented during a period of global uncertainty. (deriz@insightinnews.com)
