The Ministry of Industry recorded that the Industrial Confidence Index (Indeks Kepercayaan Industri – IKI) had reached a score of 53.94 in June 2023, showing an increase of 3.03 points compared to the previous month’s score of 50.90.
The score of 53.94 is the highest IKI score ever recorded since its release in November 2022. Previously, the highest ICI score was recorded in February 2023 at 52.32.
An indication of expansion
Febri Hendri Antoni Arif, the spokesperson of the Ministry of Industry, stated that the increase in the ICI score in June indicates the expansion of the manufacturing industry and the improvement of the market.
“This indicates that the market conditions have gradually improved,” said Febri during the IKI press conference at the Ministry of Industry Office in Jakarta on Tuesday (27/6).
Febri mentioned that in June 2023, as many as 20 subsectors experienced expansion according to the IKI, accounting for 96.5% of the Gross Domestic Product (GDP).
These subsectors include food and beverage industry, chemical industry and products, motor vehicle trailers and semi-trailers, among other sectors.
Febri added that there are three subsectors that made the most significant contributions. “Among the 23 industries monitored by the Ministry of Industry, three subsectors performed exceptionally well, namely the automotive industry, food industry, and beverage industry,” said Febri.
Driven by increase of new orders
The increase in the IKI in June was also attributed to the increase in new orders variable from 49.84 to 54.81 (an increase of 4.97 points) and the production variable from 50.01 to 54.86 (an increase of 4.85 points).
“All the variables that form the IKI experienced an increase, including new orders, production, and product availability,” said Febri.
However, there are still three industrial subsectors that experienced contraction, accounting for 3.5% of the GDP. These subsectors include textile, leather and leather goods, and other processing industries.
“These industries are still experiencing contraction, and their IKI declined due to sluggish export markets. We will make efforts to prevent contraction in the coming months,” he added.
According to the ICI research, Febri stated that 45.2% of business owners considered their business activities to be stable in June 2023 compared to May 2023. Meanwhile, 33.6% reported an increase in business activities, while 21.3% reported a decrease.
Febri also mentioned that 66.2% of business owners expressed optimism regarding the industrial business conditions for the next six months. “The majority of respondents who expressed optimism conveyed their confidence in the improvement of market conditions and the better policies of the central government,” he said.
