Ministry to start calculating Industrial Confidence Index in September

Minister of Industry Agus Gumiwang Kartasasmita.

Newstoday Jakarta - The Ministry of Industry will start calculating the Industrial Confidence Index (IKI) in September 2022 through the National Industrial Information System (SIINas).

"We want to have precise and accurate figures on the perception of the industry," Minister of Industry Agus Gumiwang Kartasasmita noted in Jakarta, Friday.

According to Kartasasmita, the essence of IKI is similar to the Purchasing Manager's Index (PMI) of industrial manufacturing issued by IHS Markit to measure industry perceptions.

He pointed out that the Ministry of Industry was unaware of which industrial sectors were to be included in the calculation of IHS Markit to obtain the Indonesian manufacturing PMI figure.

"The PMI that we have received so far from Markit, we do not know which industries are surveyed. We only know that 400 companies were surveyed without knowing which sectors were surveyed," the industry minister remarked.

Kartasasmita noted that with the IKI, the government could gain an understanding of the perception of industry players, so they could mitigate and prepare policies that aligned with the industry needs.

The Ministry of Industry will distribute questionnaires to industries whose contents will not be too different from those submitted by IHS Markit and Bank Indonesia (BI).

According to the minister, the questionnaire will be distributed to several industries based on data of Operational Permits and Mobility of Industrial Activities (IOMKI).

"We already have the IOMKI data, with a total of 16 thousand companies registered by IOMKI," the industry minister said.

Nevertheless, Kartasasmita is grateful that Indonesia's Manufacturing PMI rose again in July 2022, which was 51.53, higher than the June 2022 figure of 50.2.

Moreover, he noted that Indonesia was one of the only three countries in the world that had clocked an increase in PMI in July 2022.

The Indonesian Manufacturing PMI was compiled by IHS Markit on the basis of answers to monthly questionnaires sent to purchasing managers, who are members of a panel comprising about 400 manufacturing companies.

The panel is grouped by sector size and company workforce in detail, based on its contribution to the gross domestic product (GDP).

Survey responses are collected in the second half of each month and indicate the direction of change as compared to the previous month.

The index varies between 0 and 100, with data above 50 indicating an overall gain as compared to the previous month, and below 50, an overall decline.