Jakarta. The S&P Global Purchasing Managers' Index (PMI) for manufacturing in Indonesia dropped to 48.9 in August 2024, down from 49.3 in July, indicating the second consecutive month of contraction in factory activity. A reading below 50 signifies a contraction.

In response to this downturn, Bobby Gafur Umar, Vice Chairman of Industry at the Indonesian Chamber of Commerce and Industry (Kadin), called for stricter regulations on imports, particularly from China.

"Other countries are taking bold measures. Indonesia is among those with the fewest regulations to protect its industries and market. The government needs to be more assertive," Bobby Gafur Umar said during an interview with IDTV on Tuesday.

He noted that local industries, such as textiles, toys, traditional medicines, cosmetics, and footwear, are being negatively impacted by an influx of cheap foreign products, which are displacing domestic producers.

Bobby urged the government to enhance domestic purchasing power by prioritizing the purchase of locally produced goods through state and regional budgets.

"The impact is significant," Umar emphasized. "We must safeguard and support our domestic industries by implementing stricter import controls and maximizing government and regional spending on local products."

The August 2024 drop represents the steepest decline since August 2021, with output and new orders shrinking the most in three years. Foreign orders also decreased sharply, marking the fastest drop since January 2023, partly due to reported shipping issues.

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