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Labor-intensive investment shows negative growth: BKPM

Jakarta Post - October 22, 2015

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Ayomi Amindoni, Jakarta – The Investment Coordinating Board (BKPM) reported the growth of Indonesia's labor-intensive sector investments declined by 11.74 percent throughout the first nine months of 2015, following the country's economic slowdown.

BKPM chief Franky Sibarani said that in the period between January and September this year, only labor intensive sectors experienced negative growth, in which it declined by 11.74 percent to Rp 41.55 trillion (US$3.7 billion) from Rp 47.08 trillion.

"The sector, which was experiencing a slowdown from January to September, is labor-intensive investment. Four sectors included in the labor-intensive sector are textiles and textile products (TPT), foot wear, food and beverages and also furniture," said Franky in Jakarta on Thursday.

Of all of the sectors mentioned, Franky added, footwear sector investments decreased by 17.9 percent in the third quarter of 2015. "Despite the negative growth in the third quarter, it is better than the first quarter of 2015, in which it saw a 53 percent decrease," he said.

Franky further said it was expected that the third economic stimulus package, which was launched in September, could bring a positive impact on labor-intensive industries.

"After the third package and an improved rupiah exchange rate, some textile raw materials industries, which previously reduced their production volume, began to return to normal operations," said Franky.

BKPM data show that from January to September 2015 realized investments in the infrastructure sectors rose by 12.4 percent year-on-year (yoy), while the agriculture sector grew by 8.2 percent, followed by the maritime sector (28.6 percent) and the export-oriented industry (10.4 percent). Meanwhile, the country's mineral refinery and tourism sector recorded the highest growth, reaching 66.8 percent and 62.6 percent, respectively. (ebf)

Source: http://www.thejakartapost.com/news/2015/10/22/labor-intensive-investment-shows-negative-growth-bkpm.html.