Indonesia's Furniture Industry Under Pressure: Rising Costs and Export Constraints
JAKARTA, KOMPAS.com - The national furniture and handicraft industry is beginning to feel heavy pressure due to rising production costs and policies deemed not fully supportive.
This labour-intensive sector is now in a vulnerable position amid increasingly tight global competition.
Chairman of the Indonesian Furniture and Handicraft Industry Association (HIMKI), Abdul Sobur, revealed that industry players are currently facing simultaneous pressures, ranging from rising energy costs, limited raw material availability, to operational hurdles and export liquidity arrangements.
“In recent times, various policy dynamics and cost pressures have been felt tangibly by national industry players. Rising energy costs, limited access to raw materials, operational hurdles, and export liquidity arrangements are factors that do not stand alone but occur simultaneously,” Sobur stated in a press release on Wednesday (15/4/2026).
Downstream labour-intensive industries such as furniture and handicrafts are the most affected due to their characteristics of absorbing a large workforce, being export-oriented, and highly sensitive to production cost changes.
“In such conditions, it is important to recognise that policy impacts are not always evenly distributed across all sectors. Downstream labour-intensive industries, like furniture and handicrafts, tend to be in a more vulnerable position. This sector absorbs millions of workers, is export-oriented, and is highly sensitive to changes in production costs and logistics,” he explained.
Rising costs not offset by efficiency or policy support could directly pressure the competitiveness of Indonesian products.
On the other hand, smooth raw material supply and liquidity support are crucial factors for the industry’s sustainability.
Sobur assessed that overly stringent policies in regulation, despite good intentions, need to be reviewed so as not to hinder production activities.
In that context, he emphasised the importance of a more precise and sectoral policy approach.
According to him, industrial policies cannot be general but must consider the character and needs of each sector, especially downstream industries that make a significant contribution to workforce absorption and state foreign exchange.
Going forward, a balance between regulation and growth is seen as the key.
“A balance between regulation and growth must be a shared concern. Support for downstream sectors is not just about sustaining businesses but also about safeguarding the national economic foundation based on value addition and job creation,” he continued.