Investment is expected to jump in the fourth quarter, given the fast growth in capital good and raw material imports in recent months, as shown by the latest Central Statistics Agency (BPS) data.

Imports grew by 6.42 percent month-on-month (mom) in November and 11.04 percent in October, far exceeding export growth of 0.26 percent and 3.62 percent, respectively.

Raw material imports grew by 3.32 percent mom in November and by 12.13 percent in October, while capital good imports grew by 20.65 percent and 5.6 percent in the same months.

Capital goods with the greatest rise in imports include construction equipment, imports of which tripled mom to US$83 million, followed by steam turbines, where imports more than doubled to $47.7 million, and laptops, which saw an increase of 68.6 percent to $122.6 million.

“We hope to see this capital good import growth translate into higher investment in the fourth quarter,” said BPS head Suhariyanto.

Economists agree that the jump in imports indicates rising investment in various sectors, ranging from palm oil and coal to pharmaceuticals, textiles and the food and beverage industry.

German drug maker Fresenius Kabi AG kicked off a new production plant in Cikarang, West Java, in October, while Coca-Cola Amatil Indonesia (CCAI) is scheduled to produce new coffee machines — named Grinders Caffitaly System — next week.

The investment was in line with a rebound in non-oil and gas manufacturing amid higher commodity prices, said University of Indonesia (UI) economist Fithra Faisal Hastiadi.

“These kind of capital goods and raw materials are good, because they indicate industrial growth amid a recovery in commodity prices,” he told The Jakarta Post, predicting investment growth of 5 percent quarter-on-quarter at year-end.

The non-oil and gas manufacturing sector grew by 5.49 percent year-on-year (yoy) in the third quarter, Industry Ministry data show.

The sector’s gross domestic product (GDP) contribution recovered to 22 percent in 2016 from 19 percent in 2015, according to the same data.

Separately, Bank Central Asia (BCA) economist David Sumual noted that the capacity utilization rate of all sectors had improved to 75 percent from 68 percent in the past two years.

“Firms have been delaying their capital expenditure and are just disbursing it now for expansion,” he told the Post.

As import growth outpaced export growth in November, the trade surplus dropped to $130 million, the lowest level so far this year.

“The drop in the surplus this time is due to the surge in imports amid [only] slight growth in exports. Export growth was dragged down by sectors of oil and gas and mining in November,” Suhariyanto said.

While imports grew by 6.42 percent mom to $15.15 billion, exports only increased by 0.26 percent to $15.28 billion. Oil and gas exports dropped by 14.22 percent and mining exports dropped by 8.09 percent in November. The latter had increased by 11.95 percent in October.

Meanwhile, non-oil and gas exports increased by 1.82 percent, far lower than the 7.37 percent increase in imports.

Among all non-oil and gas categories, only manufactured goods booked an increase in exports at 4.39 percent, while agriculture and mining declined by 9.5 percent and 8.09 percent, respectively.

The cumulative surplus from January through November surged by 41.6 percent yoy to $12.02 billion, as exports increased by 17.16 percent to $153.9 billion and imports were up 15.47 percent at $141.8 billion.

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