After Rapid Growth, Furniture Exports Weakened in 2022

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Adi Ahdiat 17/03/2023 15:40 WIB

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Following strong growth during the 2019-2021 period, the performance of Indonesia's furniture export industry weakened in 2022 due to slowing global demand.

Indonesia's Furniture Industry Export Volume and Value (2015-2022)

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Indonesia's Furniture Industry Export Volume and Value (2015-2022)

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According to data from the Central Statistics Agency (BPS), Indonesia's furniture industry exports reached 619,000 tons in 2022, down 11% year-on-year (yoy).

However, the export value only contracted by approximately 2% (yoy) to USD 2.8 billion.

This decline in performance occurred after the furniture industry experienced rapid growth for three consecutive years, even reaching a record high in 2021, as shown in the graph.

At the beginning of 2023, the Minister of Manpower (Menaker), Ida Fauziyah, allowed several industries, including the furniture industry, to cut worker salaries by a maximum of 25% due to slowing global demand.

The details of this policy are stipulated in Article 8 of the Manpower Minister Regulation Number 5 of 2023, which reads:

(1) Certain labor-intensive export-oriented industries affected by global economic changes may adjust worker wages, with the provision that wages paid to workers are at least 75% (seventy-five percent) of their usual wages.

(2) The adjustment as referred to in paragraph (1) is made based on an agreement between the employer and the workers.

However, labor-intensive industries permitted to cut worker salaries must meet the following criteria:

* A minimum of 200 workers;
* Labor costs account for at least 15% of production costs; and
* Production depends on order requests from the United States and countries in Europe, evidenced by order requests.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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After Rapid Growth, Furniture Exports Weakened in 2022

After Rapid Growth, Furniture Exports Weakened in 2022

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After Rapid Growth, Furniture Exports Weakened in 2022

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