Linkage Analysis of Cement Industry in the Indonesian Economy: Input-Output Analysis

Abstract

This study aims to determine the relations of backward and forward linkages of cement industry on the various economic sectors in Indonesia. In analyzing the relations, Indonesias input-output table of year 2005 isusedwhich is based ontheIndonesian domestic transactions on the basis of the producer price of 175 sectors classification. The results showed that the cement industry has backward linkages to the 43 sectors (5 sectors that have the biggest backward linkage are: the coal sector, electricity and gas sector, natural gas and geothermal sectors,excavation goods and oil refining goods) and has forward linkages to 15 sectors (5 sectors that have the biggest forward linkage, namely: agricultural infrastructure sector, roads, bridges and ports, goods from non-metallic materials, residential and non-residental buildings, the building sector and the installation of electricity, gas, water and communication), in the direct linkages, both backward and forward linkages of cement industry are still considered as low, and the total linkages of the cement industry has stronger association with upstream sector when compared to the downstream sector. The conditions of the backward linkages of cement industry in 2014 is assumed to be relatively the same as those in 2005, while the forward linkage in 2014 indicates a shift in the sectors that have the biggest linkage to the cement industry.