TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
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.
Change Size
I
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.
Manufacturers continued to report a rapid increase in input costs, partly because of higher raw material and transportation costs, IHS Markit noted. As a result, output price inflation remained at the relatively high level seen in December.
IHS Markit reported that overall sentiment among manufacturers remained positive in January as they expected the pandemic situation to continue improving, allowing the economy to grow further. Yet the level of optimism fell to the lowest since May 2020.
“Suppliers’ delivery times notably improved following a two-year streak of deterioration, which was also a positive sign. It will be important to observe if things continue to take a turn for the better, as price pressures remain steep due to lingering supply issues,” said Pan.
