Job layoffs are looming over the Indonesian textile industry. Global demand has plummeted due to the threat of a 2023 recession.
Inflation in several export destination countries for Indonesian textiles and textile products (TPT) has caused a decline in demand. As a result, many textile companies in Indonesia have reduced their operating hours.
According to the Indonesian Textile Association (API), the performance of the textile industry has dropped by up to 30% since September 2022.
API Chairman Jemmy Kartiwa Sastraatmadja stated that some TPT industry employees have been laid off. This has occurred at one factory in West Java.
"(The textile industry) is now in an unsafe phase, as there have been employee reductions. The bad signs are already there. Reductions have been ongoing, with signs appearing since September," Jemmy said, as quoted by Katadata.co.id on Wednesday (26/10).
Jemmy stated that much of Indonesia's TPT production cannot be marketed due to declining purchasing power, both domestically and for exports.
"There are no positive sentiments driving demand to increase; there is no demand. This is because global conditions are also poor. Export markets for Indonesian TPT, such as Europe and America, have weakened sharply," he said.
According to a report from the Central Statistics Agency (BPS), the United States is the main export destination for Indonesian ready-made garments or textile-based clothing. The export value reached US$3.86 billion.
This figure represents 55.94% of the total value of Indonesian ready-made garment exports in 2021, which amounted to US$6.9 billion.
Japan and Germany are the next largest export destinations for ready-made garments, with values of US$534.6 million and US$324.9 million respectively.
Here are the top 10 export destinations for Indonesian ready-made garments in 2021:
1. United States: US$3.86 billion
2. Japan: US$534.6 million
3. Germany: US$324.9 million
4. South Korea: US$282.2 million
5. Australia: US$193.7 million
6. China: US$171.6 million
7. Canada: US$155.3 million
8. United Kingdom: US$141.6 million
9. Belgium: US$85.7 million
10. United Arab Emirates: US$51.7 million
11. Others: US$1.09 billion