International Journal of Technology (Sep 2024)

Performance Evaluation of The Industrial Resilience Index by Using Cross-Correlation Method

  • Ida Bagus Made Putra Jandhana,
  • Haerani Natali Agustini

DOI
https://doi.org/10.14716/ijtech.v15i5.5599
Journal volume & issue
Vol. 15, no. 5
pp. 1462 – 1472

Abstract

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This paper shows how resilience-based measurements, Industrial Resilience Index (IRI), is able to indicate the performance trend of general manufacturing, measured in Gross Domestic Product (GDP), impacted by shocks represented by the value drops of the Rupiah to the US Dollar. This paper argues that IRI is able to measure not only the resilience of the Metal Product Manufacturing Sector (MPMS) but also the performance dynamic of the general manufacturing industry. This study evaluates the IRI performance by using the cross-correlation method. The cross-correlation process consists of a comparison between IRI and the GDP of the manufacturing industry, as well as a comparison to other indices related to manufacturing sectors, such as the Purchasing Manager Index (PMI), the Production Index of Large and Medium Manufacturing Industry (PII), the Competitiveness Industrial Performance (CIP), and the Global Competitiveness Index (GCI). The positive and high value of the correlations in this study shows IRI’s ability to reflect the sector resilience and the GDP of the general manufacturing industry trend. The result of this study suggests that IRI can be utilized as a dynamic indicator of the general manufacturing industry. Through its data series and trend analysis, decision or policymakers may employ IRI to forecast how resilient MPMS, as well as the general manufacturing industry trend, is when the sector faces shocks in the future. The result of the study shows that cross-correlation coefficient of IRI is 0.74. The coefficient value indicates that IRI is a coincident indicator within the business cycles of the general manufacturing industry. Therefore, as an alternative of resilience-based measurement, the study suggests that IRI is able to demonstrate its significance in predicting the resilience of MPMS and the general manufacturing industry, in anticipating a dynamic shock is in the future.

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