Exporters pessimistic on Q3 outlook: Survey

Exporters pessimistic on Q3 outlook: Survey

The Jakarta Post, Jakarta

The country's exporters are pessimistic that they will be able to
increase export volumes in the third quarter of this year, a
survey has revealed.

The pessimistic tone was induced by a weak performance during
the second quarter.

"Some 38 percent of the respondents agreed that they failed to
meet revenue targets in the second quarter.

"This led to the drop in the exporters' third quarter
confidence index from 32.5 -- at the beginning of the second
quarter -- to 27 percent," consultant firm Castle Asia and U.S.
delivery firm DHL said in a joint report released on Thursday.

The survey was carried out in July and covered some 200
leading export companies in Indonesia.

The report did not clearly outline the main reasons for the
dismal export performance in the second quarter, but said that
the cost of raw material and the exchange rate were two important
factors affecting export sales.

The rupiah strengthened against the U.S. dollar during the
first six months of this year. Experts have said that the
appreciation of the local currency would make the country's
export products less competitive compared to the products of
competing countries whose currencies did not appreciate as
quickly as the rupiah.

Experts have said that various uncertainties at home plus the
current global economic slowdown were slowing down Indonesia's
exports.

However, the gloomy outlook will be likely short-lived, the
report said.

It is expected that the confidence index will rise next year
from 32.1 to 37.1, on the back of a global economic recovery and
a competitive exchange rate of between Rp 8,000 and Rp 9,000 to
the dollar.

Exporters were upbeat about an increase in export sales to
China, Western Europe and Korea, the survey said.

It added that exporters were also eager and optimistic to
export products and services to the U.S. and Canada, but African
and Middle East markets were still out of the question.

Exporters also said that an exchange rate stronger than Rp
8,500 would make the country's export products less competitive.

Some 50 percent of the respondents said that the currency
exchange rate was an important factor affecting export
performance.

In regard to the labor conflict issue, the survey said that 68
percent of the exporters who were surveyed said they were
"neutral" on the labor problem issue.

Only 12 percent said they were very concerned about the labor
problem here.