Just when Indonesia’s economy started showing signs of slowing, one industry defied expectations. The Indonesia’s furniture industry, long known for its craftsmanship and export strength, recorded a remarkable performance in early 2025—even as clouds began to gather over its largest export destination, the United States.
In the first quarter of 2025, the furniture industry posted a 9.86% year-on-year growth, with a 4.37% increase compared to the previous quarter, as reported by CNBC Indonesia. These figures marked the sector’s strongest growth since Q4 2024. What makes this spike even more striking is the broader economic context: Indonesia’s overall economy grew by only 4.87%, its weakest expansion since the third quarter of 2021.
A key factor behind this impressive upswing was the 2025 Indonesia International Furniture Expo (IFEX), held in early March. The event drew more than 600 exporters and attracted 15,000 buyers from 115 countries. With a total exhibition area of 60,000 square meters, IFEX 2025 became the largest furniture expo in Southeast Asia. The event generated an estimated US$350 million in on-the-spot potential transactions.
This surge in international interest signaled strong global demand, reaffirming the competitiveness of Indonesian furniture. It also demonstrated that the industry still had global appeal, at least until trade pressures begin to take hold.
But the positive momentum didn’t last long. In April, the US announced plans to impose a 32% tariff on Indonesian furniture imports. Although implementation was postponed for three months, the shock hit the market immediately. American buyers started delaying shipments, leaving goods stuck in warehouses and cash flows under pressure.
“Even though the tariffs haven’t taken effect yet, the impact is already being felt. Many orders are being delayed,” said Abdul Sobur, Chairman of the Indonesian Furniture and Handicraft Industry Association (HIMKI), speaking to CNBC Indonesia.
Read also: Hotels Struggle Amid Budget Efficiency, Layoffs and Lost Revenue Grip the Industry
The threat is particularly serious because the US market accounts for 53.8% of Indonesia’s total furniture and handicraft exports. These exports are critical for regional economies, particularly in Java and Bali, where the industry supports large labor forces.
Facing this uncertainty, the industry is moving fast to protect itself. Two strategies are now in play. First, producers are looking inward—focusing on the domestic market, which is beginning to open up thanks to increased government spending. Second, companies are trying to diversify export destinations, though this won’t be easy in the near term.
Europe, another key market, is introducing stricter sustainability rules that could become new hurdles. Meanwhile, the Middle East and Africa have yet to reach the scale needed to replace the US market. In this environment, design innovation and production efficiency are more important than ever for survival.
Whether Indonesia’s furniture industry can ride out this brewing storm remains to be seen. For now, the first quarter of 2025 shows resilience and promise. But without a clear strategy for market diversification, product reformulation, and trade diplomacy, this threat could turn into long-term damage.
