business

Keep An Eye On Expansion; The Ministry Of Industry Is Pushing For Faster Implementation Of Industrial Protection Policies

This situation is happening across almost all subsectors. Only a few sectors are seeing growth in their production variables, like the Textile Industry, Wood Industry, Other Processing Industries, and Repair and Installation Services for Machines and Equipment. On the flip side, three subsectors are facing contraction, namely the Textile Industry, Paper and Paper Products Industry, and Other Processing Industries. Febri pointed out that the Textile and Paper sectors are struggling due to domestic products being outpriced by imports. This is linked to a drop in consumer purchasing power, leading people to opt for more economical choices. Some cooperative schemes, like the Regional Comprehensive Economic Partnership (RCEP), are also seen as more beneficial for foreign producers. Additionally, the Other Processing Industries are contracting due to a decline in orders for products like musical instruments, false eyelashes, wigs, ceramic tiles, brushes, pen connectors, and gas lighters. Febri further explained that the Beverage Industry is experiencing slower growth due to concerns over proposed taxes on packaged sweetened drinks. Meanwhile, the Electronics and Cosmetics Industries are also slowing down, as reflected in their low utilization rates due to the influx of imported products in the domestic market. Several negative factors affecting the IKI in August include the weakening PMI in key partner countries like China, the U.S., and India, a rise in global gas prices in August 2024, a drop in the Real Sales Index for July 2024, potential cuts in government procurement, and China's challenges with rising unemployment, disinflation risks, and a struggling property sector. However, IKI experts noted some positive factors that could help maintain IKI in August, such as a decrease in inflation trends, an increase in Japan's PMI, rising capital inflows, and hopes for lower interest rates from The Fed.

The situation is reflected in the business activity perception for August, which rose by 4.1% to 34.8%. The percentage of respondents reporting an increase or stability is at 79.1%, up from 76.6% the previous month, marking the highest since the IKI was released. Meanwhile, 20.9% of respondents indicated a decline in their businesses in August 2024, continuing a downward trend over the last five months. However, business optimism has dipped compared to July 2024, now sitting at 71.6%. This is still considered stable since the percentage of pessimistic respondents also fell from 6.0% to 5.9% in August 2024. Febri highlighted that the Ministry of Industry is preparing for several policies that could impact industrial performance and business optimism, including Government Regulation No. 28 of 2024 regarding the implementation of the Health Law and plans for excise on sweetened beverages and certain food groups to provide businesses with certainty for better production planning. Other policies to watch include a moratorium on certain nickel smelter processing and refining licenses, a ban on exporting class 2 nickel products, and trade regulations on stainless steel billets and slabs to promote downstream processing and maintain nickel ore reserves. The implementation of an integrated metal industry application is expected to support the necessary supply-demand information. The Ministry of Industry will also continue to push for the rapid expansion of HGBT, expedite the application of Anti-Dumping Duties (BMAD), especially for affected industries like ceramics and paper, enforce SNI standards, and accelerate restrictions on imported goods and the enforcement of illegal imports. To boost manufacturing production, the Ministry of Industry has prepared and proposed a Draft Government Regulation (RPP) on Natural Gas for Domestic Needs, aiming to ensure the availability of gas raw materials for the industrial and energy sectors.

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Tag: Implementation Of Industrial Installation Services For Machines Ministry Of Industry Wood Industry