The manufacturing sector in Indonesia plays a vital role in the country’s social and economic development. Over the last decades, the government has prioritized this sector to maximize its potential contribution to accelerated industrialization. Today, the manufacturing sector is Indonesia’s largest GDP contributor and lies at the heart of the Indonesian government’s goals to develop the country into the top ten largest economies globally by 2030.
Employment in Indonesia’s manufacturing sector
The major manufacturing industries include food and beverages (F&B), chemicals, basic metals, textiles and apparel, and automotive, with the majority of manufacturers in this sector being micro, small, or medium-sized businesses. The F&B industry and the chemical, pharmaceutical, and traditional medicine industries, were the top two GDP contributors from manufacturing. Unlike the chemical industry, which is heavily dominated by large companies, the F&B processing sector consists more of micro-sized businesses. In 2019, Indonesia’s food processing industry employed over 4.2 million people, with over 75 percent of workers employed by micro and small-scale producers, whereas chemical manufacturers employed approximately 55 thousand individuals, or 20 percent of chemical manufacturers’ employees, in micro and small-scale businesses.
The manufacturing sector in Indonesia employs over 18.7 million people in 2019. By 2024, the government wants to boost employment in this sector to 20 percent of the total workforce. In comparison to other Asian countries, the labor cost in Indonesia is relatively low. The average monthly net wage of manufacturing workers in Indonesia ranges from 95 to 350 U.S. dollars. Manufacturing sectors that accounted for a significant portion of employment include food manufacturing, textile manufacturing, and wood manufacturing. In 2019, these three industries employed 55 percent of all manufacturing workers.
Indonesia’s strategies to improve its manufacturing sector
The manufacturing industry also plays an important part in Indonesian exports, accounting for more than 70 percent of the country’s overall export value in 2021. Machinery, electronics, and electric equipment were the top three exports, while automotive, food and beverage, and industrial estates received the most domestic and foreign direct investments. However, Indonesia’s exports in several sectors remain primarily centered on intermediate exports, implying that the country has been unable to build downstream processing activities. Most notably, this is the case for mining, wood, paper, petroleum, chemicals, rubber, and basic metals.
Due to its cost-effective and abundant labor, Indonesia is becoming a more enticing destination for foreign investments. To boost the industrial sector’s growth, the Indonesian government established Indonesia’s Digital Industry Center 4.0 (PIDI 4.0) in December 2021 to develop the essential capacity and technical skills required for Industry 4.0. Upskilling approximately 400,000 workers in Indonesia’s manufacturing sector is one of the targets. PIDI 4.0 will also serve as a learning hub, assisting enterprises in developing value chains. Investing in human capital, high-tech infrastructure, facilitating research and development, and facilitating knowledge transfer from international corporations to local manufacturers, are Indonesia’s current strategies to improve the nation’s vital sector. Acquiring more domestic and international investments will also be crucial to this strategy.
Table of Contents
Overview
Production
Food and beverage
Chemicals and chemical products
Basic metals
Other segments
Investment values
Employment
1. Overview
Description: In 2021, preliminary figures showed that the manufacturing sector contributed to approximately 19.25 percent of Indonesia’s GDP. The second-biggest contributor to Indonesia’s GDP in 2021 was the agricultural sector and followed by the wholesale and retail trade and the repair of motor vehicles and motorcycles sectors.
Description: In 2021, preliminary figures showed the GDP from manufacturing activities in Indonesia was at about 3.27 quadrillion Indonesian rupiah. Over the last decade, the manufacturing sector has been the largest contributor to Indonesia’s GDP and has become a significant source of investment and job creation.
Description: In 2021, the manufacturing sector contributed approximately 19.25 percent to Indonesia’s GDP. Indonesia is one of the world’s largest manufacturing countries, and the industry is becoming increasingly important to the country’s economy.
Description: In 2021, the manufacturing sector of food products and beverages in Indonesia contributed approximately 6.61 percent to Indonesia’s GDP. Indonesia is one of the world’s largest manufacturing countries, and the industry is becoming increasingly important to the country’s economy.
Description: In March 2022, the Purchasing Managers` Index (PMI) of the manufacturing sector in Indonesia was 51.3. During the surveyed period, Indonesia’s PMI for manufacturing sector dropped to the lowest in April 2020. Until March 2022, the index has been consistently rising, with a decline between May and July 2021.
Description: In 2021, the manufacturing industry contributed approximately 76.49 percent to Indonesia’s total export value. This value had increased by almost four percent since the previous year. Manufacturing sector has been Indonesia’s one of most important sectors over the last decade.
2. Production
Description: In 2020, the production volume of rubber, rubber products, and plastics from the micro and small-sized manufacturing industry in Indonesia increased by 16.32 percent, making the subsector the country’s only growing manufacturing industry. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2020, the production volume of rubber, rubber products, and plastics from the large and medium-sized manufacturing industry in Indonesia increased by 28.3 percent, making the subsector the country’s only growing manufacturing industry. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2020, the highest gross value added from the micro-sized manufacturing industry in Indonesia derived from apparel, which amounted to approximately 52.54 trillion Indonesian rupiah. Food products came in second, with a value of 42.63 trillion Indonesian rupiah. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2020, the highest gross value added from the small-sized manufacturing industry in Indonesia was derived from apparel, amounting to approximately 15.59 trillion Indonesian rupiah. Food products came in second, with a value of 15.58 trillion Indonesian rupiah. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2019, the highest gross value added from the large and medium-sized manufacturing industry in Indonesia was derived from food products, amounted to approximately 601.98 trillion Indonesian rupiah. Chemical and chemical goods came in second, with a value of 255.21 trillion Indonesian rupiah, or around 40 percent of the value of food products. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
3. Food and beverage
Description: In 2021, preliminary figures showed that the gross domestic product (GDP) from manufactures of food products and beverages in Indonesia was about 1.1 quadrillion Indonesian rupiah. The GDP from manufactures of food products and beverages in Indonesia has gradually increased since 2014.
Description: In 2021, the gross domestic product growth rate for the food and beverage manufacturing sector in Indonesia was estimated to be around 2.54 percent. Indonesia is one of the world’s largest manufacturing nations. Its manufacturing sector employs almost a fifth of Indonesia’s working-age population and accounts for nearly a quarter of the country’s total GDP.
Description: This statistic shows the revenue of the food products manufacture industry in Indonesia from 2012 to 2024. It is estimated that the revenue of manufacture of food products in Indonesia will amount to approximately 143 billion U.S. Dollars by 2024.
Description: In 2020, the gross value added from the micro-sized food manufacturing industry in Indonesia amounted to approximately 42.63 trillion Indonesian rupiah. Indonesia is one of the world’s largest manufacturing nations and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2019, the gross value added from the large and medium-sized food manufacturing industry in Indonesia amounted to approximately 601.98 trillion Indonesian rupiah, accounting for an increase compared to the previous year. The gross value added by the industry had doubled since 2013.
4. Chemicals and chemical products
Description: In 2021, preliminary figures showed that the gross domestic product (GDP) from manufactures of chemicals, pharmaceuticals and botanical products in Indonesia amounted to 339.18 trillion Indonesian rupiah. The GDP from manufactures of chemicals, pharmaceuticals and botanical products in Indonesia has gradually increased since 2014.
Description: In 2021, the gross domestic product growth rate for chemicals, pharmaceuticals, and botanical products manufacturing sector in Indonesia was estimated to be around 9.61 percent. Indonesia is one of the world’s largest manufacturing nations. Its manufacturing sector employs almost a fifth of Indonesia’s working-age population and accounts for nearly a quarter of the country’s total GDP.
Description: This statistic shows the revenue of the industry manufacture of chemicals and chemical products in Indonesia from 2012 to 2024. It is projected that the revenue of manufacture of chemicals and chemical products in Indonesia will amount to approximately 35.47 billion U.S. Dollars by 2024.
Description: In 2019, the gross value added from the large and medium-sized chemicals and chemicals products manufacturing industry in Indonesia amounted to approximately 255.21 trillion Indonesian rupiah, accounting for a decrease compared to the previous year. The gross value added by the industry had fluctuated within the observed timeline, with the lowest in 2013.
Description: In 2019, the gross value added from the large and medium-sized pharmaceutical manufacturing industry in Indonesia amounted to approximately 61.86 trillion Indonesian rupiah, accounting for a decrease compared to the previous year. The gross value added by the industry had fluctuated within the observed timeline, with the highest in 2017.
5. Basic metals
Description: In 2021, preliminary figures showed the GDP from manufactures of basic metals in Indonesia was at about 137.6 trillion Indonesian rupiah. Indonesia is a major producer of nickel in the global market and has many mines of other minerals besides nickel, such as copper, bauxite, iron ore, coal, and gold.
Description: In 2021, the gross domestic product growth rate for the basic metals manufacturing sector in Indonesia was estimated to be around 11.5 percent. Indonesia is one of the world’s largest manufacturing nations. Its manufacturing sector employs almost a fifth of Indonesia’s working-age population and accounts for nearly a quarter of the country’s total GDP.
Description: This statistic shows the revenue of the industry manufacture of basic metals in Indonesia from 2012 to 2024. It is projected that the revenue of manufacture of basic metals in Indonesia will amount to approximately 15.1 billion U.S. Dollars by 2024.
Description: In 2019, the gross value added from the large and medium-sized basic metals manufacturing industry in Indonesia amounted to approximately 196.55 trillion Indonesian rupiah, accounting for an increase compared to the previous year. The gross value added by the industry had fluctuated within the observed timeline, with the lowest in 2013.
6. Other segments
Description: This statistic shows the revenue of the industry manufacture of wearing apparel in Indonesia from 2012 to 2024. It is projected that the revenue of manufacture of wearing apparel in Indonesia will amount to approximately 23.41 billion U.S. Dollars by 2024.
Description: This statistic shows the revenue of the tobacco products manufacture industry in Indonesia from 2012 to 2024. It is projected that the revenue of manufacture of tobacco products in Indonesia will amount to approximately 13.95 billion U.S. Dollars by 2024.
Description: This statistic shows the revenue of the industry manufacture of paper and paper products in Indonesia from 2012 to 2024. It is projected that the revenue of manufacture of paper and paper products in Indonesia will amount to approximately 13.95 billion U.S. Dollars by 2024.
Description: This statistic shows the revenue of the industry manufacture of rubber and plastics products in Indonesia from 2012 to 2024. It is projected that the revenue of manufacture of rubber and plastics products in Indonesia will amount to approximately 21.77 billion U.S. Dollars by 2024.
Description: This statistic shows the revenue of the wood manufacturing industry in Indonesia from 2012 to 2024. It is projected that the revenue of manufacture of wood and of products of wood and cork in Indonesia will amount to approximately 11.73 billion U.S. Dollars by 2024.
7. Investment values
Description: In 2021, the investment value of basic metals manufacturing industry in Indonesia amounted to approximately 114.8 trillion Indonesian rupiah. Indonesia is one of the world’s largest manufacturing nations and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2021, the investment value of basic metals manufacturing industry in Indonesia amounted to approximately 114.8 trillion Indonesian rupiah. This value increased by almost 23 trillion Indonesian rupiah from the previous year. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2021, the investment value of food manufacturing industry in Indonesia amounted to approximately 56.7 trillion Indonesian rupiah. This value increased by almost ten trillion Indonesian rupiah from the previous year. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
Description: In 2021, the investment value of chemicals manufacturing industry in Indonesia amounted to approximately 26.8 trillion Indonesian rupiah. This value decreased by almost four trillion Indonesian rupiah from the previous year. Indonesia is one of the world’s largest manufacturing nations, and the importance of the manufacturing industry in the country has continuously increased over the previous few decades.
8. Employment
Description: In 2021, approximately 37.13 million people were employed in the agricultural, forestry, hunting, and fisheries sector. This was the largest sector for employment in Indonesia in that year.
Description: As of August 2021, manufacturing industry workers accounted for approximately 14.23 percent of Indonesia’s total workers. Manufacturing sector has been Indonesia’s one of most important sectors over the last decade.
Description: In 2020, the number of workers in the micro-sized food manufacturing industry in Indonesia amounted to approximately 2.83 million. In total, there were around 6.95 million workers in Indonesia’s micro-sized manufacturing industry.
Description: In 2020, the number of workers in the small-sized tobacco products manufacturing industry in Indonesia amounted to approximately 1.25 million. In total, there were around 2.69 million workers in Indonesia’s small-sized manufacturing industry.
Description: In 2019, the number of workers in the large and medium-sized food manufacturing industry in Indonesia amounted to over one million. In total, there were around 6.24 million workers in Indonesia’s large and medium-sized manufacturing industry.
Source from Statista.
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