Manufacturing Industry Still Successful in Quarter II-2018

By : Ridwan And Aldi Firhand. A | Tuesday, August 07 2018 - 18:59 IWST

Illustration Manufacturing Industry (Photo Dok
Illustration Manufacturing Industry (Photo Dok - Jakarta, the non-oil and gas processing industry still shows a positive performance, where in the second quarter of 2018 it grew to 4.41 percent or higher than the achievement in the same period last year of 3.93 percent.

In fact, the manufacturing sector is consistently the largest contributor to the national Gross Domestic Product (GDP), which was recorded at 19.83 percent in the second quarter 2018.

"Of course now we must look forward, that the manufacturing sector is one of the spearheads of the Indonesian economy because its contribution reaches 18-20 percent. So, our economic growth depends on the manufacturing sector," Industry Minister Airlangga Hartarto said here on Tuesday (7 / 8/2018).

The sectors that underpin the growth of the non-oil and gas processing industry in the second quarter of this year include the rubber industry, goods from rubber and plastics which grew by 11.85 percent, followed by the leather industry, leather goods and footwear by 11, 38 percent.

Furthermore, the growth of the food and beverage industry penetrated 8.67 percent, and the textile and apparel industry reached 6.39 percent. The performance of these manufacturing sectors is able to surpass national economic growth.

Airlangga said that the momentum of Eid and Region Election this year had a positive impact on rising domestic demand resulting in an increase in production in a number of manufacturing sectors, such as the food and beverage industry, the textile and textile products industry, the footwear industry, and the printing industry.

"Moreover, next year there will be elections, more product demand," he said.

Referring to the Central Statistics Agency (BPS) data, the production growth of large and medium manufacturing industries showed an increase in the second quarter of 2018 of 4.36 percent year-on-year (y-o-y) against the second quarter of 2017. Meanwhile, the production growth of micro and small manufacturing industries in the second quarter of 2018 also experienced a 4.93 percent increase (y-on-y) against the second quarter of 2017.

Meanwhile, the Nikkei Indonesia Manufacturing Purchasing Managers Index (PMI) survey also showed that the PMI index in July 2018 rose to 50.5 compared to June 2018 which reached 50.3. The PMI index above 50 indicates the industry is able to expand.

"The increase in PMI is very positive, proving that our manufacturing industry is wriggling. So, we must guard and continue to push to be more productive and competitive," said Airlangga.

Nikkei also stated that as of July, the number of new businesses in Indonesia rose for six consecutive months. In addition, the level of employment in Indonesia's manufacturing sector also rose for two consecutive months.

The Minister of Industry is optimistic that the growth of the national manufacturing industry will increase in the third quarter or second semester of 2018. Therefore, the government continues to strive to create a conducive business climate in the country so that companies can be more aggressive and expansive so that they can meet the needs of the domestic market and export.

"We believe that in the next semester there will be an increase due to industries related to the mining sector, its performance will improve along with the increase in commodity prices," said Airlangga.

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