According to a report by La Repubblica on September 17, a research report by the Indonesian Export Financing Agency (LPEI) showed that the Indonesian textile industry is one of the industries hardest hit by the epidemic.
Indonesia is a major textile country, and the textile industry contributes significantly to Indonesia’s GDP, exports, and employment. Since the epidemic, this proportion has declined. In 2020, the textile industry contributed 1.21% to GDP (1.26% in 2019), and the export contribution rate was 6.12% (7.15% in 2019). The textile industry employs approximately 3 million people, accounting for 2-3% of Indonesia’s overall employment.
From the perspective of exports, the textile industry is facing pressures from three aspects: supply, demand, and circulation. In particular, the shortage of containers has pushed up export costs. Indonesia’s textile exports in 2020 were US$10.55 billion, a year-on-year decrease of 17.7%, of which yarn, fabrics, and clothing decreased by 27.3%, 15.7%, and 15.1% respectively. Clothing accounts for 66% of Indonesia’s textile exports. Its downward trend has put great pressure on the textile industry, and the impact is expected to last until the first half of 2021. The increase in demand for personal protective equipment caused by the epidemic has a certain boost to the textile industry, but it is not enough to make up for the decline in overall demand. From the perspective of textile enterprises, large enterprises have performed strongly relying on their strong export market network, while sales of small and medium-sized enterprises have declined sharply.
