The Impact of the Covid-19 Pandemic on the Creative Hair Craft Industry in Purbalingga: Microeconomic Perspective

Abstract

Purbalingga, located in the Central Java Province, is renowned for its hair craft creative industry. Like many other businesses, it faced a decline in performance during the Covid-19 pandemic. This study aimed to assess the profitability, efficiency, and consumption patterns of creative industry entrepreneurs in the hair craft sector before and during the pandemic. The analysis involved examining profit, the R/C ratio, and Average Propensity to Consume (APC). The sample was selected through purposive random sampling, with hair craft entrepreneurs as respondents. The findings revealed that, before the pandemic, the average monthly earnings for each hair craft entrepreneur were IDR 4.96 million. Some entrepreneurs even recorded profits ranging from IDR 500 thousand to IDR 25 million. However, during the pandemic, the average monthly loss per entrepreneur was IDR 305 thousand. While some managed to still earn up to IDR 4.5 million in profit, others experienced losses of up to IDR 400 thousand per month. Before the pandemic, the average R/C ratio for each entrepreneur was 1.6, indicating that revenue was 1.6 times greater than the costs incurred. However, during the pandemic, the average R/C ratio dropped below 1, specifically to 0.96, signifying that revenues were insufficient to cover the costs, indicating inefficiency. Regarding consumption patterns, it was observed that during the pandemic, nearly all entrepreneurs faced challenges, with only 1 percent exhibiting a low APC. In conclusion, the pandemic led to a decline in the performance of the hair craft creative industry in Purbalingga. Therefore, comprehensive support from various stakeholders is essential to sustain this creative industry as a leading sector.