The Indonesian textile and textile products (TPT) industry has been under severe pressure for the past two years. Based on data released by S&P Global, Indonesia's Purchasing Managers' Index (PMI) in August 2024 fell to 48.9, indicating a further contraction in the manufacturing sector.
The General Chairperson of the Indonesian Filament Yarn Producers Association (APSyFi), Redma Gita Wirawasta, stated that the TPT sector has experienced significant pressure since 2022. Not only has it had an impact on TPT, this negative growth has also spread to other sectors such as footwear, leather, rubber, petrochemicals, and electronics. Redma criticized the government's slow response in addressing this problem.
In line with Redma, an economist from the Institute for Development of Economics and Finance (INDEF), Ahmad Heri Firdaus, said that the contraction reflected in the Indonesian Manufacturing PMI data for two consecutive months is a rare occurrence. Ahmad emphasized that this situation must be a serious concern for the government, considering the importance of the manufacturing sector for the Indonesian economy.
The decline in the Manufacturing PMI reflects business actors' pessimism about future business prospects. To overcome this problem, the government needs to take steps to increase industry confidence in market conditions. Thus, production can be boosted again and employment absorption can increase.
The impact of the continued decline in the Manufacturing PMI and deflation for four consecutive months indicates a serious threat to economic stability. This is a sign that the government needs to act immediately to improve the condition of national manufacturing.