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An Overview of Indonesia's Manufacturing Industry in 2023

An Overview of Indonesia's Manufacturing Industry in 2023
An Overview of Indonesia's Manufacturing Industry in 2023

Innovation and Growth in Indonesia's Manufacturing Industry in 2023

Throughout the year 2023, Indonesia's manufacturing industry experienced several significant developments that could shape its future. Technological innovations carried out by businesses supported by the government made the manufacturing industry in 2023 one of the pillars of Indonesia's economy.

Let's take a look back at some highlights from the manufacturing industry in the past year!

Expansive PMI and IKI Throughout the Year

Sepanjang tahun 2023, Purchasing Managers’ Index (PMI) industri manufaktur Indonesia Throughout 2023, Indonesia's Purchasing Managers' Index (PMI) in the manufacturing industry remained at an expansive level.

In August 2023, Indonesia recorded its highest PMI in the manufacturing industry at 53.9, the highest in the past 2 years.

The results of the Industrial Confidence Index (IKI) survey also remained high since the beginning of the year, reaching 51.4 and showing an increase from December 2022, which was at 50.9. This indicates the high level of confidence or optimism among manufacturing sector businesses regarding the economic conditions.

Pertumbuhan Ekonomi
Source: Freepik

Regulations by the Ministry of Industry

The Ministry of Industry made several efforts to address challenges faced by players in the manufacturing industry. In the early months of 2023, from January to July, raw material imports accounted for 73.25% of the total national imports. This prompted the Ministry of Industry to implement regulations to control raw material imports and increase exports.

Another issue faced by the manufacturing sector in 2023 revolved around the capabilities and quality of human resources. With technological innovations, Indonesia needs a workforce that can adapt to the sophistication and development of the industry. The Ministry of Industry has made efforts such as facilitating educational buildings and providing training to enhance the quality of human resources in the manufacturing sector.

Pelatihan SDM
Source: Freepik

Boosting Economic Growth

The manufacturing sector contributed 16.77% in Q1-2023 and 16.30% in Q2-2023 to Indonesia's economic growth, making it the largest contributor among other sectors. This was also possible due to the government's push to accelerate digital transformation in the manufacturing sector.

The manufacturing sector also became the largest contributor to the country’s Gross Domestic Product (GDP), accounting for 19%.

This sector also ranked as the third-largest contributor to employment. Overall, Indonesia's economic growth in Q3-2023 was 4.94% (year-on-year), showing a decrease from Q3-2022, which was at 5.72%. Although Indonesia's overall economic growth was slow, the manufacturing sector successfully supported the country's economic growth.

Pertumbuhan Produk Domestik Bruto 2021-2023
Source: Badan Pusat Statistik (BPS)

Technological Innovation

Indonesia's manufacturing industry has begun implementing advanced technologies in the era of Industry 4.0, one of which is robotics. At the Manufacturing Indonesia 2023 event, several companies showcased their robots used in the production process.

Although robotics has not yet become a popular technology for manufacturing processes, the use of collaborative robots can see an increase in the manufacturing sector due to their ability to enhance production efficiency, reduce production costs, and improve product quality. With the development of robotic technology, it is expected that Indonesia's manufacturing industry can further develop and compete on a global scale.

Robot Manufaktur
Source: Freepik

Upon reflecting on the progress in Indonesia's manufacturing sector in 2023, it is to be acknowledged that there have been significant developments in this industry. Imajin Manufacturing Hub is proud to have been part of the transformation of Indonesia's manufacturing sector. We are committed to continuously fostering innovation and improving through our SaaS features upgrade. With strong support from the government, we are optimistic about making a greater contribution to the future growth of Indonesia's manufacturing industry.

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