Players in the furniture and crafts industry still see gloomy prospects for the coming months as signals on possible recovery still remain over the horizon, an association says.
The negative impact of the global downturn on the furniture and handicrafts industry was confirmed in the first quarter of 2009 as total exports slumped by 35 percent compared to the same period last year.
These conditions, say Association of Indonesian Furniture and Handicraft Exporters (Asmindo), are likely to persist in the first half of 2009.
"I know there are signs of improvement in the country's first quarter economic reports. It is also true that some Asmindo's members reported a slightly increase in their May sales. However, furniture sales are yet to recover," Asmindo chairman Ambar Tjahjono said Thursday.
The increase in May was too small to think in terms of recovery. Ambar said, "The increase in sales was too small."
The Central Statistics Agency (BPS) reported exports of furniture, bedding, cushions, and stuffed furnishing from the beginning of January until the end of April reached US$578.2 million, a decline of 24 percent year-on-year.
Despite representing a fall in exports, the BPS said the total value of exports in April actually brought the sector back into the top 10 sectors with the largest export values.
However, Ambar said, this was not enough reason to expect a recovery yet. BPS said total exports for April reached $141.2 million, still down 14.9 percent from March.
A key variable that could turn the tables for the better was government support, something that was still largely absent, Ambar said. "Whether there is a crisis or not, there is no change in regulations in the industry," he said referring to the slow capacity of government to adapt to the challenge at hand.
"Asmindo met government representatives this morning and talked about our difficulties.
"From the meeting, I concluded that government does not have any special plan to help our industry. The economic slowdown does not have any impact on their policies," Ambar said.
The consequences of the decline in exports and lack of government support have been very bad for the industry. Producers are struggling to pay their employees and trying their best to avoid layoffs.
Alit Wisnawa, a furniture entrepreneur from Denpasar, Bali said that he has repeatedly postponed paying the salaries of his employees.
PT Kambuna Jaya, Alit's company, suffered a decline of about 25 percent in sales values since November last year.
"These circumstances are about the same as in other furniture companies in Bali," he said.
In an attempt to reduce costs and increase efficiency, Alit cut the working hours for his employees, reduce the cost of salaries.
Disappointed with the government, the association said it would turn to the lawmakers for support and also to propose suggestions.
"At least Asmindo can help the lawmakers get new information regarding the furniture sector. For the government, our associations just have to adapt to the current situation," Ambar said. (mrs)
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