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View all search resultsJob creation weakening despite industrial growth, Industry Minister says
The Industry Ministry has pointed to a potentially diverging trend between industrial growth and job creation as expansion leans heavily toward the technology sector.
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Job seekers sit in line on June 8 during the opening of the Bogor Job Fair 2026 at Plaza Jambu Dua in the West Java city. (Antara/Arif Firmansyah)
T
he country’s industrial sector is continuing to expand but its capacity to generate jobs is weakening, with each percentage point of economic growth now creating at most 300,000 jobs, down from around 400,000 previously, according to the Industry Ministry.
“There has been a change in the character of our industry. [...] Even if we can accelerate industrial growth and push it higher, the change in the character of our industry could mean lower employment absorption,” Industry Minister Muhammad Sarmuji told reporters on Thursday, as quoted by Kompas.com.
The shift toward technology-based industries meant that faster industrial expansion might no longer translate into job creation at the same rate as before, he said.
Read also: Geopolitical uncertainty leads to mass layoffs in East Java
The manufacturing sector showed signs of recovery in September, with the S&P Global Purchasing Managers’ Index (PMI) rising to 52.4 from 49.8 in August, returning to expansion territory as new orders grew at their fastest pace since February.
The stronger PMI reading contrasted with the ministry’s Industry Confidence Index (IKI), which fell to 51.93 in September from 53.02 a year earlier, signaling slower manufacturing expansion.
The divergent trend comes as Indonesia continues to grapple with mass layoffs, a weakening formal job market and rising informal employment.
