Challenges and Opportunities in Non-Oil and Gas Manufacturing Exports-Imports: June 2024 Development Analysis

Jakarta, INTI - Indonesia's non-oil and gas manufacturing industry continues to face challenges and seize opportunities amidst the dynamic global economy filled with uncertainties. In June 2024, this sector once again showed interesting movements worth observing, with fluctuations in both export and import values. Based on data from the Ministry of Industry and the Central Bureau of Statistics (BPS), the performance of the non-oil and gas manufacturing sector this month provides insight into the complexities faced by this industry.

Overall, the export performance of the non-oil and gas manufacturing sector in June 2024 saw a decline compared to the previous month (month-to-month/m-to-m). The export value in June was recorded at US$ 16.06 billion, down by 1.44% from May 2024, which reached US$ 16.29 billion. This decline is somewhat surprising, considering that this sector had shown a positive trend in previous months. However, when compared to the same month in 2023 (year-on-year/y-on-y), exports actually increased by 5.50%. This shows that on an annual basis, the non-oil and gas manufacturing sector still has fairly good performance.

The decline in June 2024 exports could be due to several factors. First, ongoing global uncertainties, such as geopolitical tensions and commodity price fluctuations, affected demand for Indonesian export products. Second, logistical constraints and disruptions in global supply chains also contributed to the decline in export value. Nevertheless, industry players are continuously adapting to these conditions, as evidenced by the increase in export volume in the same month.

In terms of volume, exports of the non-oil and gas manufacturing sector in June 2024 reached 11.62 million tons, up by 11.13% compared to the previous month, which reached 10.46 million tons. This increase indicates that industry players are striving to increase production efficiency and reduce costs, thereby enabling them to ship more products to international markets, even at a lower value. The increase in volume also shows that this sector still has strong competitiveness in global markets.

On the import side, the value of imports in the non-oil and gas manufacturing sector in June 2024 saw a significant decrease of 8.68% compared to May 2024, from US$ 14.96 billion to US$ 13.66 billion. This decline indicates adjustments made by the industry in response to the drop in domestic and global demand. Nevertheless, if we look at it year-on-year, the import value in June 2024 actually increased by 0.86% compared to June 2023. This suggests that the need for imported raw materials is still quite high, despite efforts to reduce dependence on imports.

In addition, the import volume also experienced a significant drop in June 2024. The import volume decreased by 15.20% from the previous month, reaching 8.71 million tons to 7.38 million tons in June 2024. This decline in import volume could be due to decreased demand for raw materials or semi-finished goods from abroad, in response to reduced production in the domestic market. This indicates that the non-oil and gas manufacturing industry is in an adjustment phase, both in terms of production and consumption of raw materials.

It is important to note that several industrial sectors recorded significant surpluses in June 2024. For instance, the food sector recorded a surplus of US$ 2.53 billion, the basic metals sector recorded a surplus of US$ 1.86 billion, and the chemicals and chemical products sector recorded a surplus of US$ 1.27 billion. This surplus shows that some industrial subsectors still have good performance, even though the overall non-oil and gas manufacturing sector experienced a decline.

Moving forward, the main challenge for the non-oil and gas manufacturing sector is how to maintain and even improve competitiveness in global markets. Several strategic steps that need to be taken include increasing innovation, expanding product diversification, and exploring new potential markets. In addition, improving production efficiency and reducing dependence on imported raw materials are also key to maintaining the stability of this sector.

The government also has a very important role in supporting the non-oil and gas manufacturing industry. Pro-industry policies, such as providing adequate infrastructure, supporting innovation, and trade policies that favor exports, are essential to drive the growth of this sector. Thus, it is hoped that the non-oil and gas manufacturing industry can continue to be a major driver of the national economy amid increasingly complex global challenges.

Data Sources: Ministry of Industry, Republic of Indonesia; Central Bureau of Statistics (BPS)