The Ministry of Industry targets the gross domestic product (GDP) of the manufacturing industry in 2024 to grow 5.8%, higher than the 2023 projection of 4.81%. On the other hand, safeguardglobal.com noted that last year, Indonesia was included in the top 10 contributors to world manufacturing products and was the only ASEAN country. Based on this publication, Indonesia contributes 1.4% to global manufactured products. This prestigious position is a significant increase, because four years ago, Indonesia was still in 16th position.
The increase in ranking also indicates that the manufacturing sector has a multiplier effect on other sectors. As an illustration, with increasing industrial output, the transportation sector will also increase, as will the energy, agricultural, plantation and maritime sectors which are sources of raw materials and production input factors for the manufacturing sector.
Indonesia’s position in the ranks of world manufacturing is strengthened by the value of industrial output which continues to increase in the period 2020 to September 2023. In 2020, the value of industrial output was recorded at US$ 210.4 billion, then increased to US$ 228.32 billion in 2021, and increased again amounting to US$ 241.87 billion in 2022. Meanwhile, until September 2023, the value of industrial output has reached around US$ 192.54 billion.
Responding to this, Economist from the Institute for Economic and Community Research, Faculty of Economics and Business (LPEM FEB) University of Indonesia, Kiki Verico, said that the manufacturing sector continues to show positive performance in its contribution to the Indonesian economy. It is hoped that this positive performance will become the main capital to attract more foreign investment with an export orientation.
“Indonesia currently cannot be called deindustrialized. Deindustrialization is experienced by countries that have reached the stage of advanced manufacturing or advanced manufacturing, then declined (sunset) and started to be replaced by other countries whose manufacturing was just taking off (sunrise). The advanced industrial countries then shifted their backbone. “the economy is moving from the manufacturing industry to the service sector,” explained Kiki, written Friday (29/3/2024).
Kiki also said that collaboration between ministries was needed to strengthen the manufacturing sector which in the future could increase Indonesia’s exports and make a bigger contribution to the national economy.
Throughout 2023, the manufacturing industry recorded impressive performance and contributed to the growth of national Gross Domestic Product (GDP). This can be seen from Bank Indonesia’s Prompt Manufacturing Index (PMI) in the fourth quarter of 2023 which reached 51.2% or is still in the expansion zone. This figure is in line with data released by S&P Global which shows the manufacturing sector has been at an expansion level above level 50 for 30 consecutive months. Only two countries were able to record this achievement, namely Indonesia and India. Manufacturing is still the number one contribution to GDP in Indonesia, namely 19% in 2023. In terms of labor absorption, the manufacturing sector also still contributes 16% of the total in Indonesia.
The manufacturing sector is also the highest tax contributor in Indonesia. “This means that manufacturing is very significant for the Indonesian economy, because the added value is the greatest, labor absorption is also the largest, formal activities that provide a fixed salary are also the largest, so tax revenues are also the largest from manufacturing,” he explained.
March 29, 2024, detikFinance
(https://finance.detik.com/industri/d-7267740/kinerja-manufaktur-ri-tumbuh-positif-begini-datanya)