Manufacturing sector's growth slows
The Jakarta Post, Jakarta
Indonesia's non-oil and gas manufacturing industry has continued to expand quite rapidly this year, but the overall growth rate has actually been declining during the first three quarters of the year, a report revealed on Monday.
As of September 2005, the manufacturing sector grew by 6.76 percent, as compared to 7.7 percent during the January-June period and 7.0 percent in the January-April period, figures from the Ministry of Industry showed.
The growth however, remains on tract to meeting the full-year target of 6.8 percent.
"We are very close to reaching the target," said Minister of Industry Andung Nitimihardja.
"If there had been no external factors such as the fuel price hikes, the sector could have exceeded the current figure," he argued.
"Despite the current obstacles, the growth of the sector could still meet this year's target of 6.8 percent."
Fluctuating exchange rates, fuel prices hikes and the current higher loan interest rates were among the reasons behind the slower pace of growth, said Budi Darmadi, the ministry's director general for automotive, information and telecommunications manufacturing industries.
"But, it is more important that we can still reach the target," he added.
The data showed that the automotive, electronics and information and telecommunications manufacturing sub-sector had experienced substantial growth of 12.8 percent as of September.
Two other sub-sectors, chemicals and agriculture-based industries, also exceeded their targets, with the latter contributing some 27.4 percent, thereby making up the lion's share of overall growth.
Meanwhile, the chemical and cement industries expanded by 10.7 percent and 6.98 percent respectively. As of June, however, the two sectors had experienced higher growth of 13.1 percent and 9.4 percent respectively.
Other areas experiencing healthy growth, Andung said, were both foreign and domestic investment, imports of capital goods, and exports.
According to data from the Capital Investment Coordinating Board (BKPM), as of September 2005, total foreign direct investment increased to US$3.1 billion from $2.8 billion in the same period last year. Meanwhile, domestic investment reached Rp 8.5 trillion and was expected to exceed the 2004 figure for total investment of Rp 10.5 trillion.
The new investment was still predominantly in the chemical, food, metal, machinery and electronics industries.
Exports from the manufacturing sector increased by 21 percent to $48.3 billion in the first nine months of 2005 from $39.9 billion in the same period last year.
Imports of capital goods and supporting goods also increased by 30.5 percent to $43.7 billion in 2005 from $33.5 billion previously.
The manufacturing sector, Andung added, had hired 580,000 more workers as of September, adding to the total of 11.07 million people employed in the sector as of December 2004.
"Next year, we will focus on labor-intensive industries and exports. The ministry is now developing clusters of prioritized industries," he said, adding that textiles and garments, and agriculture-based industries would continue to be among those prioritized.