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January 30, 2025 | 09:50 pm
TEMPO.CO, Jakarta - The Industry Ministry reported that the Industrial Confidence Index (IKI) rose to 53.1 in January 2025, up 0.17 points from 52.93 in December 2024. Ministry spokesperson Febri Hendri Antoni Arief said that 20 industrial subsectors remained in expansion territory, scoring above 50, while three industries saw contraction, falling below the threshold.
The strongest growth was recorded in the transportation equipment and electrical equipment industries. Meanwhile, the beverage sector, along with the computer, electronics, and optical goods industries, posted declines.
This month’s IKI was also buoyed by a rise in new orders, which climbed to 52.7, up 2.03 points from the previous month. Febri attributed the increase to seasonal demand ahead of Ramadan, when orders for manufactured goods typically surge to meet demand during the fasting month and Eid celebrations.
He forecast that sectors set to benefit from this pre-Ramadan boost include food, beverages, textiles and textile products (TPT)—particularly ready-made garments—miscellaneous manufacturing, electronics, and automotive. "Industries usually ramp up production one to two months before peak demand," he said at a press conference at the Ministry of Industry in Jakarta on Thursday, January 30.
Production output remained in expansion mode at 53.39, despite easing by 2.14 points from the previous month. Meanwhile, inventory levels also expanded at 53.59, though they edged down by one point.
Febri noted that industries had moderated production compared to previous months but remained in expansion territory due to high stock levels in warehouses.
"Why are stock levels still high? Because industries ramped up output in November and December 2024 in anticipation of a planned increase in value-added tax (VAT) to 12%," Febri explained.
However, those concerns ultimately proved unfounded. At the end of the year, President Prabowo Subianto announced that the VAT hike would only apply to ultra-luxury goods and services. Nonetheless, Febri described the industry's preemptive production increase as a reasonable precaution, given earlier expectations that a broader range of goods would be subject to the new tax rate this year.
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