The Ministry of Industry reports that the Industrial Confidence Index (IKI) for January 2024 has reached 52.35, indicating a notable increase of 1.03 points compared to December 2023, which stood at 51.32. Eko SA Cahyanto, the Director General of Resilience, Regional, and International Industrial Access at the Ministry of Industry, highlighted that the January 2024 IKI has also risen by 0.81 points compared to the same period last year, reaching 51.54. During a press conference on the January 2024 IKI, Eko revealed that all 17 sub-sectors of the IKI contributed to the expansion of the industrial Gross Domestic Product (GDP) in the third quarter of 2023, reaching an impressive 90.08%. The IKI employs a baseline of 50 to represent a neutral level. Values above this midline indicate expansion, while figures below 50 signify a slowdown or contraction. Eko explained that when analyzing all IKI components, three main variables are considered. The variables for new orders are at 52.17, production at 53.63, and inventory components at 50.80, signifying that all components are in an expansion phase.

Eko noted that the expansion slowed in the new orders variable due to a decline in domestic and foreign orders, with some respondents attributing it to domestic price competitiveness. Production expansion also saw a slowdown, primarily due to a decrease in orders, especially from overseas, and other factors such as ample product inventory, raw material availability, and seasonal factors. Conversely, the expansion in the inventory component experienced a significant increase compared to December. This was attributed to the absorption of industrial products in the market, particularly the domestic market, along with smooth shipping and logistics operations. The overall rise in IKI reflects positive sentiments and a favorable outlook within Indonesia's industrial sector for January 2024.

Source: https://www.idxchannel.com/economics/indeks-kepercayaan-industri-iki-januari-2024-naik-jadi-5235/2