Apparently, Coronavirus Disease (Covid-19) is not only a threat to human health, but also to the state orders, including the economy, industrial activities, consumption levels, and export-import. In Indonesia, impacts of the pandemic have begun to be felt with the implementation of a number of rules to minimize the spread of the virus.
Undeniably, the decreasing activities of the people, has also affected other related sectors, including the industrial sector. Activities of Indonesian manufacturing industry can be seen from the Purchasing Manager Index (PMI). In Indonesia, based on data collected, the index in was only 45.30 March 2020 –decreasing significantly from 51.90 in the previous month. This figure is also the lowest index over the past 10 years. Production capacity of some industries has decreased by nearly 50%, except for the medical device and medicine industry, and food and beverage industry. The decreasing index is also contributed by the declining rate of consumption of the people toward some basic needs, such as clothing products. In past, the clothing products such as clothes and footwear became one of the biggest contributors into the growth of the manufacturing industry, especially ahead of religious holidays such as in the coming recent months.
Meanwhile, PT. Visi Globalindo Data Utama predicts that Indonesian manufacturing industry will continue to decrease in the second quarter of 2020. Despite the moments of Ramadan and Ied Mubarak, the manufacturing industry is predicted to only increase by 2.12%, if the national economy could grow by 4%. If the figure is lower, in fact, the growth of the national manufacturing industry will even drop lower than 2.12%. This situation could be worsening, since the people are predicted to hold their consumption, due to the decrease in their income.
Furthermore, the stop operations of some factories as part of the global efforts to prevent the spread of Covid-19 have also hampered the supply chain of the imported goods needed by the manufacturing industry, particularly. Based on data from Badan Pusat Statistik (BPS), import value of all categories of goods dripped in February 2020, if compared to January 2020. Import value of consumptive goods decreased by 39.91% to US$ 881.7 million. Import of raw materials/auxiliary materials decreased by 15.89% to USD 8.89 billion, and import value of capital goods decreased by 18.03% to USD 1.83 billion. The decreasing import of raw materials and capital goods indicates a weakening condition in production activities of the national manufacturing industry during the period. If the decrease continues in April, the manufacturing industry in Indonesia will be decreasing lower and lower until the third quarter of the year; and the impacts will even last longer.
China, as the epicentrum of Covid-19 outbreak, supplies some 30% of raw materials for the national manufacturing industry. Thus, disruption of shipment of raw materials from China has forced the Indonesia manufacturing industry to work hard to find sources of supply of raw materials from other countries.
Likewise, the government also continue to do everything in their power to secure the national manufacturing industry. So far, the Indonesian government has issued a number of policies, including the exemption of import duty on raw materials for 19 industrial sectors that face difficulty in obtaining supplies of raw materials due to the Covid-19 pandemic. These 19 sectors are: chemicals and chemical-based products industry, electrical equipment industry, automotive industry, trailer and semi-trailer industry, pharmaceutical industry, chemical medicine and traditional medicine industry, basic metal industry, other transport equipment industry, paper and paper goods industry, Food industry, Manufacture of computers, electronic and optical goods industry, machinery and equipment industry, Textile industry, Rubber, rubber goods and plastic goods industry, Furniture industry, Printing and recording media reproduction industry, Non-metal quarrying industry, Non-machinery metal goods and equipment industry, Finished materials industry, Beverage Industry, and Leather, leather goods and footwear industry.
With such policies, operational activities of the national manufacturing industry are expected to remain stable, amid the uncertainty of the global condition caused by the pandemic.