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Indonesia’s manufacturing PMI rises to 51.7 in August
The manufacturing industry improved at the fastest pace in four months on the back of rising demand.
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Workers assemble electric irons at a factory operated by PT Selaras Citra Nusantara Perkasa in Cileungsi, Bogor, West Java, on Aug. 19, 2020. (JP/Wendra Ajistyatama)
Indonesia’s manufacturing industry has improved at the fastest pace in four months on the back of rising demand.
The latest report by IHS Markit, now part of S&P Global, shows that Indonesia’s manufacturing purchasing manager’s index (PMI) reached 51.7 in August, a slight increase from 51.3 in July.
PMI readings above 50 indicate overall expansion in the manufacturing sector, while figures below that threshold denote contraction. The PMI has been in expansionary territory for each of the past twelve months.
S&P Global Market Intelligence economist Laura Denman explained that more pronounced growth in both output and total new orders was an “encouraging sign for the future health of the [Indonesian] economy”, with firms frequently mentioning firmer underlying demand.
“The continued easing of inflationary pressure was another positive aspect of August’s survey, which saw both input and output cost inflation moderate to a 14-month low. We can hope to see a sustained easing of price pressures as the impacts of COVID-19 continue to recede,” she said in the report released on Thursday.
Furthermore, the report highlighted that manufacturing production in the country surged for a third consecutive month in August and at the quickest rate in seven months, reflecting a steady post-pandemic economic recovery.
In line with that, the new orders subindex also rose at the fastest pace in six months in August on the back of firmer domestic demand, while new export orders contracted for the third month in a row.
