The performance of the manufacturing industry continues to support national economic growth, contributing 19.28% in the first quarter of 2024 compared to 18.57% in the same period in 2023 year-on-year (yoy). Notably, two subsectors, namely the leather, leather goods, and footwear industry, and the textile and apparel industry, exhibited positive growth in Q1 2024. According to the Central Statistics Agency, these subsectors contributed 5.90% (yoy) and 2.64% (yoy) growth, respectively, during this period. Adie Rochmanto Pandiangan, Director of the Textile, Leather, and Footwear Industry (ITKAK) at the Ministry of Industry, commented on the robust performance, stating that the manufacturing industry remains the main driver of Indonesia's economy. This growth is attributed to strong domestic and foreign demand, with foreign demand for textile products increasing by 7.34% (yoy), apparel by 3.08% (yoy), and footwear by 12.56% (yoy) in Q1 2024.
The stability of domestic household consumption, supported by the 2024 elections, national holidays, collective leave, and the Lebaran festivities, further propelled the growth of these industries. The increasing Industrial Confidence Index (IKI), particularly for the textile industry, which saw expansion in April 2024 for the first time since November 2022, underscores this trend. Similarly, the apparel industry has been expanding since November 2023, and the leather, leather goods, and footwear industry since July 2023. High production and inventory levels indicate optimal market absorption of these products. Bank Indonesia (BI) reported increased performance in Q1 2024, with the Prompt Manufacturing Index (PMI-BI) showing the textile and apparel industry in the expansion phase at 57.40%, and the leather, leather goods, and footwear industry at 55.36%, projected to reach 61.07% in Q2 2024. Investment in these sectors also grew, with IDR 24.6 trillion in 2022, IDR 27.9 trillion in 2023, and IDR 6.9 trillion in Q1 2024. Despite production increases, challenges remain in securing labor, particularly for SMEs in West Java and new footwear industries in Indramayu. The Ministry of Industry anticipates further growth if measures to curb the consumption of second-hand clothes and stricter market supervision against imports are enhanced.
