Industrial confidence index in October was 50.70 and still expanding

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Ministry of Industry spokesperson Febri Hendri Antoni Arif (left) speaks at a press conference on the October Industrial Confidence Index in Jakarta on Tuesday.

[News from this newspaper]The Industrial Confidence Index (IKI) released by the Ministry of Industry in October 2023 was 50.70, a slowdown of 1.81 points compared with 52.51 in September 2023.

Ministry of Industry spokesperson Febri Hendri Antoni Arif said at a press conference on the October Industrial Confidence Index in Jakarta on Tuesday: “”The Industrial Confidence Index in October 2023 is still at an expansion level, at 50.70. This means that the industrial confidence index has slowed by 1.81 points compared with 52.51 in September 2023. “

Fabry pointed out that there were three main factors that led to the decline in IKI in October. The first factor is the decline in global purchasing power caused by the global economic slowdown, especially the sharp reduction in demand for my country’s manufactured goods from major trading partners such as the United States, China and Europe.

“In the domestic market, the decline in purchasing power was triggered by rising energy prices, especially fuel, and rising interest rates, which led to increased funding costs for manufacturing,” he said.

The second reason is that the lower exchange rate of the rupiah has led to an increase in the input cost of imported raw materials. This results in increased production costs. The rupiah has fallen once morest the US dollar for five consecutive months.

The third factor is external factors, such as the proliferation of imported products, the circulation of illegal goods and rising energy prices in October 2023.

From the perspective of components, the manufacturing confidence index is still expanding. The reason is that the new order variable and production variable are still expanding, at 51.72 and 50.83 respectively. Meanwhile, the product inventory variable continued to contract, falling to 47.95 from 47.40 in September 2023.

In addition, among the 23 industrial sub-sectors, 14 sub-sectors experienced expansion, contributing 78.0% to the non-oil and natural gas processing industry GDP in the second quarter of 2023.

At the same time, the remaining nine sub-sectors shrank, contributing 22.0% to non-oil and gas processing industry GDP in the second quarter of 2023.

The sub-sectors with the largest declines in the industrial confidence index were the machinery and equipment industry; the tobacco processing industry; and the computer, electronic and optical products industry.

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Industrial confidence index in October was 50.70 and still expanding – Shangbao Indonesia