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Global Economic Slowdown Pressures Furniture and Crafts Exports

JAKARTA, KOMPAS — The global economic slowdown continues to suppress the export performance of the furniture and crafts industry, especially rattan crafts. Demand for furniture and handicraft products from export destination countries decreased along with the economic slowdown.

Chairman of the Indonesian Furniture and Crafts Association (Himki) Abdul Sobur said that the export value of the furniture and crafts industry in 2023 will reach 1.8 billion US dollars, down 28 percent compared to 2022 which was 1.8 billion US dollars.

The decline in industrial export performance was due to geopolitical tensions in a number of world regions which triggered a global economic slowdown. The war between Russia and Ukraine, then Israel and Palestine, increased global uncertainty so that demand for furniture and handicraft exports decreased.

"Decreased demand for exports, including from Europe and the United States. In fact, most of the export demand comes from there. "There, they prioritize food and energy commodities," said Sobur, contacted Friday (5/1/2024).

As much as 98 percent of furniture and craft industry businesses are for the export market. The remaining 2 percent is for the domestic market. This industry absorbs a total of 2.1 million workers directly and indirectly.

Nevertheless, Sobur is optimistic that the export performance of the furniture and crafts industry will increase again in 2024. One of the drivers, continued Sobur, is because buyers in export destination countries are starting to run out of stock so they will return to ordering from Indonesian producers this year.

Apart from that, his party will rely on expanding the export market through the Indonesia International Furniture Expo 2024 which will be held on 29 February 2024-3 March 2024. This activity will be attended by 12,000 potential buyers from hundreds of countries. Through this event, the party hopes that direct transactions will occur during the exhibition amounting to 300 million US dollars and follow-up marketing of up to 1 billion US dollars over the next 4-5 months.

"This industry has strong export competitiveness because the raw materials come from within the country. So it's more efficient," said Sobur. The domestic content level (TKDN) for this industry reaches 85 percent. This means that it is easier for this industry to obtain raw materials and be ready to process them to provide more value when marketed abroad.
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