April 28, 2023
The rubber, plastic goods, and furniture industry experienced an increase and switched from contraction to expansion in April 2023. The rubber and plastic goods industry increased new orders, unlike last month when distributors reduced orders to clear available stock.
A spokesman for the Ministry of Industry (Kemenperin), Febri Hendri Antoni Arif, said during April 2023 IKI releases in Jakarta Friday (28/4) that almost the same conditions were experienced by the furniture industry, which showed an increase in orders and production as well as reduced product inventories as a result. The impact of Hari Raya (Idul Fitri) preparations increases in foreign orders.
Febri explained that the Industrial Confidence Index (IKI) for April 2023 experienced a slowdown compared to the previous month. However, in April, there was an increase in industries that carried out expansion activities. IKI in April 2023 reached 51.38 or slowed down by 0.49 points compared to March 2023.
Despite the slowdown, in April 2023, there was an increase in the number of industrial subsectors that experienced expansion, namely as many as 15 industrial subsectors, compared to March 2023, where only 14 industrial subsectors with a contribution to GDP of the Non-Oil and Gas Processing Industry in 2022 reaching 80.2%.
Sub-sectors supported this contribution with quite an immense contribution, such as the Food Industry, the Industry of Chemicals and Products made of Chemicals, and the Motor Vehicle, Trailer, and Semi-Trailer Industry. Judging from the forming variables, all the variable indexes forming the IKI in April 2023 will experience expansion. However, if we look in more detail, the decrease in the value of IKI is due to a decrease in the value of the Product Inventory variable by 2.67 points to 52.33 which indicates an increase in inventory stock, and the New Orders variable decreased by 0.76 points to 50.57 indicating a decrease in new orders. On the other hand, the value of the Production variable increased from 50.69 in March 2023 to 52.08 in April 2023. Domestic Orders are still the dominant factor influencing the New Orders variable index.
Febri explained that the decline in IKI was due to several sub-sectors with a large share of GDP experiencing contraction after previously experiencing expansion. Second, as the most significant IKI value-forming variable, the order variable experienced a decline this April. This is because the high household demand during Ramadan and Hari Raya causes the price of manufactured products to increase. On the other hand, production spending and government spending decrease significantly.
Apart from the high price factor, limited working hours during Ramadan and holidays are the reason for the decline in orders. Domestic orders are believed to increase next month as the industry begins normal production. This is a seasonal pattern that you don’t need to worry about.
Febri added that most business actors stated that general business conditions in April 2023 were stable at 45.2%, and 28.7% answered that their business activities had improved compared to March 2023.
Likewise, regarding the outlook on business conditions for the next six months, 64.7% of business actors are more optimistic. This figure has increased compared to the previous month, which was 63.5%, and is the highest figure since IKI was launched.
The majority of respondents who answered optimistically expressed their belief that market conditions would improve and that their confidence was due to better central government policies. While 9.9% of business actors are still pessimistic about business conditions for the next six months, this figure is also the lowest value since IKI was launched. ***
source: Gemabisnis.com