Article

Decreased Furniture Exports Due To The Corona Virus Which Resulted In Termination Of Employment

Since the emergence of the corona or covid 19 virus a few months ago, it has hampered export and import activities in various countries, especially imports from China and exports to China, where the initial suspicion of this virus first appeared. The central statistics agency said that during February 2020, Indonesia’s export and import performance was very weak, because 2 of these international trade activities dropped quite significantly. This causes a lot of income decline and makes the Indonesian economy less good.

One effect of the corona virus in Indonesia on the furniture sector is that some furniture companies have experienced a decline in orders and cancellation or delays in goods. because most of the export destination countries have imposed a key so that they cannot receive orders again, other than that because some furniture industries abroad have stopped operations, some have delayed orders because they cannot send goods. The decline in global demand also causes some companies to force their employees to work at home and worse, there are some companies that are forced to lay off employees or terminate employment because they cannot pay their employees’ wages.

According to the Secretary General of the Furniture and Handicraft Industry Association (HIMKI) Abdul Sobur, a wave of layoffs has occurred in the furniture industry since 3 weeks ago. That is, around 120,000 workers in the furniture industry have been laid off, “he explained in a written statement, Wednesday (3/25/2020). Abdul Sobur estimates that this wave of layoffs will reach a peak of 100 percent in the next period. Three months, if a pandemic global in coronavirus outbreaks in Indonesia cannot be overcome Based on HIMKI data, the furniture industry absorbs up to 2.1 million workers with various types of contracts, while 80 percent of the total furniture manufacturers are still in the level of small and medium industries (SMEs) with a turnover of less than USD 1 million dollars.

According to Sobur, the main cause of the magnitude of the wave of layoffs was caused by the halt or delay in global market demand since the beginning of March 2020. While 95 percent of furniture industry players in Indonesia are export-oriented. Furniture manufacturers at the IKM level only have an average cash flow capability of 1 week. “With the suspension and delay of orders which reached 3 weeks, it was clear that layoffs could not be avoided,” he added. Sobur explained, large furniture manufacturers have the power of cash flow to hold production longer, around 1-3 months. However, the manufacturer’s debt burden will also increase. Sobur considers that improvements in the current situation can only be done if the export destination countries have improved, while the Indonesian government can only help ease the burden on producers to return to production when the Covid-19 outbreak subsides.

With this condition, said Sobur, HIMKI asked for some help from the government such as delaying tax payments and relaxing debt payments in the banking sector, especially red plate banks. We all hope that this epidemic will end soon and be able to restore the country’s economy and export and import activities as usual.