Manufacturing industry has shown resilience amid pandemic: minister

Manufacturing industry has shown resilience amid pandemic: minister

Minister of Industry, Agus Gumiwang Kartasasmita. (ANTARA/ Public Relations Bureau of the Ministry of Industry)

Jakarta (ANTARA) - Indonesia's manufacturing industry has demonstrated good resilience amid the pressures of the COVID-19 pandemic by continuing to show positive performance, Minister of Industry Agus Gumiwang Kartasasmita has said.

"The resilience of the manufacturing industry has been tested in at least two crises, namely the 1998 economic crisis and the COVID-19 pandemic crisis, where the manufacturing industry was able to bounce back after previously experiencing very strong pressure," he noted at the Bisnis Indonesia Award 'Growth in Pandemic', accessed online from Jakarta on Wednesday.

In the second quarter of 2021, the non-oil and gas manufacturing sector grew quite significantly by 6.91 percent, and the sector contributed 17.34 percent to the national gross domestic product (GDP), which was higher than other economic sectors, he said.

According to the minister, overall, the performance of Indonesia's manufacturing industry from year to year has shown positive growth, with increasing contribution to GDP, increasing investment, as well as high resilience in crises.

The export contribution of the sector has continued to dominate the national export structure, he added.

"The reality of the performance of the manufacturing industry dispels the view that deindustrialization is taking place in Indonesia," Kartasasmita said.

The industry's strong performance has reflected in the Indonesian Manufacturing Purchasing Manager's Index (PMI) in the eight months since November 2020, with the index pegged at 50 or in the expansion phase, he noted.

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“In June (2021), the position was at 53.5. This shows that optimism in the industrial sector is maintained," he said.

The manufacturing PMI briefly contracted to a level of 40.1 due to the impact of restrictions on mobility and industrial operations during the Emergency Public Activity Restrictions (PPKM), he noted.

"However, in August 2021, Indonesia's manufacturing PMI position bounced back to 43.7. I am optimistic that in one or two months we will be on the expansion path again," the minister added.

The sector's resilience has also been reflected in the value of exports of the non-oil and gas processing industry in January-July 2021, which reached US$94.62 billion, contributing 78.47 percent to total national exports, he said.

"When compared to January-July 2020 the export performance of the manufacturing industry in January-June 2021 actually increased by 31.36 percent. This figure is even higher than the achievements throughout 2020," he added.

The Ministry of Industry has continued to refine policies in order to ensure the implementation of health protocols in the operation and mobility of industrial activities, he said.

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