Sector

Industry

Indonesia's industrial sector encompasses diverse subsectors that play a significant role in the country’s gross domestic product (GDP). Notably, manufacturing contributed 16.30 percent of Indonesia’s total GDP in the second quarter of 2023, with key activities including the manufacturing of textiles, automotive, electronics, and food processing. During the same period, other subsectors also experienced growth, led by the metal, computer, electronic devices, optical, and electronic appliances industry, which grew by 17.32 percent. This was followed by growth in the basic metal industry by 11.49 percent, the transportation industry by 9.66 percent, the food and beverage (F&B) industry by 4.62 percent, and the paper and recording media industry by 4.50 percent.

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Industry

Indonesia's industrial sector encompasses diverse subsectors that play a significant role in the country’s gross domestic product (GDP). Notably, manufacturing contributed 16.30 percent of Indonesia’s total GDP in the second quarter of 2023, with key activities including the manufacturing of textiles, automotive, electronics, and food processing. During the same period, other subsectors also experienced growth, led by the metal, computer, electronic devices, optical, and electronic appliances industry, which grew by 17.32 percent. This was followed by growth in the basic metal industry by 11.49 percent, the transportation industry by 9.66 percent, the food and beverage (F&B) industry by 4.62 percent, and the paper and recording media industry by 4.50 percent.

Notably, the F&B industry stands out as the only non-mineral industry to have made the largest contribution to the national GDP at 38.61 percent in the first quarter of 2023, having generated US$1.1 billion from 2,226 projects through foreign direct investment (FDI) and Rp 26.72 trillion from 5,416 projects through domestic investment sources.

Indonesia’s massive industrial development has enabled the industrial sector to provide extensive employment opportunities, with over 19 million people employed in the sector, making it the largest workforce in Indonesia as of 2019. By 2024, the government aims to further increase employment in the sector to more than 20 million people.

Among all the subsectors, the non-oil and gas manufacturing industry has emerged as one of the most important in terms of employment, providing work opportunities for approximately 14.13 percent of the Indonesian labor force in 2022. Companies within this subsector are mostly concentrated on the island of Java. Additionally, the Riau Islands are known to have the highest average net wage for manufacturing workers in the country, with around Rp 5.55 million per month as of February 2023.

Furthermore, Indonesia's industrial sector presents promising opportunities for growth and development across various fronts, including Industry 4.0 transformation, adoption of sustainable practices, regional integration with Southeast Asia and Pacific actors, downstream manufacturing, and empowerment of small and medium enterprises (SMEs). Particularly concerning Industry 4.0 transformation, the government administers the integration of advanced technologies into the production process to improve efficiency and product quality. Additionally, efforts are underway to reduce production costs by placing cement, refined petroleum, automotive, and F&B at the forefront of entering Industry 4.0.

Moreover, the incoming administration has promised to bolster the downstream agenda, especially in the mining sector, with plans for 20 new smelters set to become operational between 2024 and 2025. The shift towards downstream mining products, such as bauxite, copper, and tin has the potential to increase their value, with added values reaching up to three to 180 times along the value chain.

Latest News

June 26, 2025

Gorontalo Province Investment and One-Stop Integrated Services Office (DPMPTSP) Head Sultan Kalupe stated that the most important factor in the economy is not consumption, but the multiplier effect resulting from investment activities. Therefore, Gorontalo's economic strategies and policies will be directed at increasing investment as an effort to drive long-term economic growth.

The economic and investment performance of the Gorontalo Provincial Government in the first quarter (Q1) of 2025 showed encouraging achievements. During that period, the Gorontalo economy grew by 6.07 percent year-on-year (yoy), higher than the national economic growth of 4.97 percent. This growth was mainly driven by the manufacturing, construction, and agricultural sectors.

Furthermore, the investment realization value in Gorontalo Province reached Rp1.29 trillion in Q1 2025, or 25.58 percent of the Rp5.03 trillion annual target. This achievement also had a positive impact on job creation, which reached 2,368 new jobs. The basic metal manufacturing, non-machine metal goods, and its equipment contributed the most to said achievements.

"Currently, we have several large companies that have big investment plans for carrying out their business activities in Gorontalo Province. We will continue to encourage these companies to be able to realize their investment plans so Gorontalo's economic growth target could be achieved," said Sultan.

In addition, the regional government continues to strive to maintain certainty and clarity of regulations so that business actors, both from within and outside the country, can carry out their investments in a more measured and optimal manner.

"The government will continue to be committed to deregulation to improve the investment climate and ultimately increase economic growth in Gorontalo," concluded Sultan.

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