How Will an Economic Downturn Impact the SME Industrial Cluster in Malang?


Malang is one of the cities that supports the creation of a competitive creative economy. There are a number of industrial clusters spread throughout the Malang area, one of which is the Sanitair cluster. Industry security in Malang was very high before the COVID-19 pandemic. The COVID-19 pandemic has caused a decline in the economy and in activity in the creative economy sector in Malang, including in the Sanitair industry cluster. The economic shock caused by the COVID-19 pandemic gradually subsided as the stability of the domestic financial market and economic sectors stretched. However, the supply and demand sides of the industry were both hit, so recovery efforts still need more time. The spread of the virus also has not shown signs of ending along with the increasing trend of cases and confirmed deaths. The demand for various social and economic activities is getting stronger, marked by loosening of physical distancing in many areas. On the other hand, the existing public health infrastructure is still inadequate. So, there is a high risk to moving back the various wheels of social and economic activity in the Sanitair industry cluster in Malang. COVID-19 affected the supply chain of the SME industry, including the absorption of products, the availability of raw materials, suppliers and the distribution process of the Sanitair industry.

Keywords: Economic downturn, Industrial cluster, supply chain

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