Indonesia's Manufacturing Sector Absorbs Over 1 Million New Workers in 2024

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Kamis, 6 Maret 2025 - 18:00 WIB

Jakarta, VIVA – According to records from the Ministry of Industry, based on data from the National Industrial Information System (SIINas), job creation has grown by 20 percent compared to layoffs.

The SIINas data shows that the ratio of new workers in the manufacturing sector to those affected by layoffs is 20 to 1. This means that for every worker laid off, 20 new workers are hired.

This ratio has steadily increased, from 1:5 in 2022 to 1:7, and now 1:20 in 2024, indicating an improvement in job absorption.

In 2024, SIINas recorded that the number of new workers absorbed by manufacturing industries that started production reached 1,082,998.

This figure is significantly higher than the number of layoffs in 2024, which stood at 48,345, according to data from the Ministry of Manpower. This layoff figure includes all economic sectors, not just manufacturing.

Minister of Industry, Agus Gumiwang Kartasasmita acknowledged that some factories have shut down and layoffs have occurred. He expressed his empathy for both industrial companies and workers affected by these closures.

"The Ministry of Industry continues to encourage new investments in the manufacturing sector, supporting the emergence of new industries that start production, thereby absorbing more workers and providing alternative employment opportunities for those impacted by layoffs," the minister said on Wednesday (March 5).

He further explained that many manufacturing companies are emerging and beginning production, hiring more workers than the number laid off across various economic sectors.

The manufacturing sector has also been a major source of employment. The number of workers in the non-oil and gas industry has risen from 17.43 million in 2020 to 19.96 million in 2024.

Moreover, Minister Kartasasmita highlighted that the manufacturing sector continues to absorb more new workers than the number of employees laid off.

This data comes from industry players who report their production activities to the Ministry of Industry.

Meanwhile, layoffs and factory closures have been attributed to various factors, including declining demand in export markets, poor factory management, business strategy shifts by principals relocating production closer to foreign markets, failure to adapt to technological advancements, and other reasons.

Most factory closures have resulted from declining domestic demand due to an influx of imported products. Other factors contributing to layoffs include weakened domestic spending and raw material shortages.

"Some of these factors are beyond our control, particularly the weak demand in export markets. However, on the ground, most factory closures are due to business strategy changes," Minister Kartasasmita remarked.

Despite this, the Ministry of Industry remains focused on addressing industry shutdowns caused by raw material shortages and production technology upgrades, seeking viable solutions.

The minister emphasized the need to consider multiple factors when analyzing layoffs and finding solutions.

He also highlighted the importance of synergy between relevant policymakers, including those with the authority to implement safeguards, import restrictions (lartas), and non-tariff barriers (NTBs).