The NEXT Indonesia Research Center reported that the labor-intensive industries sector in Indonesia, despite achieving remarkable growth in 2025, continues to suffer from significant pressures that necessitate urgent government intervention. This was stated in a press release by the center's executive director, Christian Toku, who pointed out the substantial disparities among different sectors within the industry.
Toku explained that there are emerging industries, such as basic metals and machinery, that are experiencing rapid growth, while traditional industries, such as textiles, garments, and wood, are facing a marked decline. He emphasized that the rubber and plastic industry saw a contraction of 4.07% in 2025, raising concerns about the future of these sectors.
Event Details
According to data from the Indonesian Central Statistics Office, the number of workers in the manufacturing sector reached approximately 20.3 million people in August 2025, representing 13.86% of the total national workforce. This number reflects an increase of 1.49% compared to the previous year. Meanwhile, investments in the manufacturing sector amounted to around 780.9 trillion rupiah in 2025, up from 721.3 trillion rupiah in 2024.
However, the sector's contribution to total national investments declined from 42.08% in 2024 to 40.44% in 2025, indicating significant challenges in attracting foreign investments.
Background & Context
Historically, the labor-intensive industries sector has been one of the most vital sectors in Indonesia, playing a crucial role in providing job opportunities and boosting the national economy. However, changes in global supply chains and increasing competition in production costs have negatively impacted these industries, making them in urgent need of restructuring and government support.
Christian Toku believes there is an urgent need to implement remanufacturing policies aimed at enhancing the labor-intensive industries sector, improving workforce quality, and distributing investments fairly to ensure inclusive and sustainable industrial growth.
Impact & Consequences
Forecasts indicate that continued pressures on labor-intensive industries could exacerbate unemployment issues in Indonesia, necessitating immediate government intervention. Failure to address these issues may widen the gap between advanced sectors and traditional sectors, threatening the country's economic and social stability.
Furthermore, the decline in foreign investments could negatively impact overall economic growth, requiring effective strategies to attract investors and stimulate growth in struggling sectors.
Regional Significance
Indonesia is one of the largest economies in Southeast Asia, and any changes in its industries could affect regional and international markets. For Arab countries, enhancing economic cooperation with Indonesia could open new avenues for investment and trade, especially in sectors facing decline.
In conclusion, the current situation in Indonesia demands a swift and effective response from the government to ensure the sustainability of growth in the labor-intensive industries sector, contributing to the enhancement of the national economy and achieving sustainable development.