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Factory activity expands in January
Indonesia’s manufacturing purchasing managers' index (PMI) picked up to 53.7 in January from 53.5 a month earlier, staying in expansionary territory for the fifth month in a row.
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Employees work at a factory making tofu from soybeans in Surabaya on Jan. 20, 2022. (AFP/Juni Kriswanto)
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ndonesia’s manufacturing sector continues to show signs of expansion as demand from abroad has been picking up amid a global economic recovery.
The manufacturing purchasing managers’ index (PMI), a gauge of factory activity based on a survey of 400 companies, increased to 53.7 in January from 53.5 a month earlier, London-based data firm IHS Markit reported on Wednesday.
The latest manufacturing PMI data marks a fifth consecutive month of expansion, with readings above 50 signifying an increase and those below that threshold pointing to a decrease in activity.
“Client demand expanded at a sharper rate, supported by record growth in new orders from abroad. Meanwhile, higher employment levels and purchasing activity were also seen, altogether reflecting better economic conditions,” IHS Markit’s economics associate director Jingyi Pan was quoted in a press release as saying on Wednesday.
The manufacturing sector, one of the main contributors to Indonesia’s economy, has been recovering gradually from the slump caused largely by the Delta wave of the coronavirus in July and August 2021. The manufacturing PMI usually moves in the same direction as the country’s economic growth.
Read also: IMF lowers GDP growth forecast for Indonesia for 2022, 2023
IHS Markit reported that demand for Indonesian manufactured goods rose at the fastest pace in three months, thus causing the sector’s output to expand steeply. With stronger demand from overseas, new export orders grew at a record rate.
