Industry Minister Agus Gumiwang Kartasasmita affirmed that Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) in August 2022 reached 51.7 points, increasing from 51.3 points in July, thereby indicating the national industry’s increasingly conducive situation.
“The increase in the Manufacturing PMI index was driven by increased sales from domestic demand. This was a sign that efforts to recover the economy from the pandemic have shown their impact,” the minister noted in an official statement received here, Thursday.
Kartasasmita remarked that operating conditions of the country’s manufacturing sector had continued to improve in the last 12 months. Indonesia’s Manufacturing PMI had shown an improvement amid a decline in the index in other Asian countries, such as South Korea, from 49.8 in July 2022 to 47.6 in August 2022, and Japan, from 52.1 in July 2022 to 51.5 in August 2022.
S&P Global analysis showed a strong improvement in the manufacturing sector in the past four months, supported by production growth for the third month in a row, and became the fastest combined in seven months. Moreover, there was an increase in demand and an expansion of new orders at the fastest pace in six months.
Kartasasmita stated that inflationary pressures in the manufacturing sector also reduced, marked by lower input and output prices. The increase in the Indonesian Manufacturing PMI index also contributed to the increase in job creation in August. The increase in the volume of new work also led to a surge in the number of unfinished businesses in August.
The report noted that the overall business sentiment in Indonesia’s manufacturing sector remained positive amid hopes for a sustained recovery in demand.
Speaking in connection with this, the minister highlighted the need to anticipate the Russia-Ukraine geopolitical conditions that triggered the food and energy crisis. These two aspects affected the supply of commodities for the manufacturing sector.
“The manufacturing industry sector continues to experience an increase in investment. I am optimistic that this trend will continue until the end of 2022. Hence, we are striving to overcome the existing investment barriers,” he remarked.
Furthermore, the Industry Ministry is determined to spur domestic consumption by ensuring that domestic industrial products are absorbed as much as possible, one of which is through the government’s program in Increasing the Use of Domestic Products (P3DN).
“I advise industry players to continue to increase their capacity and utilization, make adjustments, and ensure industrial companies take advantage of this policy,” Kartasasmita stated.
S&P Global Market Intelligence economist Laura Denman said transparent growth in output and new total demand showed the future health of the economy. The company also drew attention to a stronger demand condition.
Price pressure due to inflation is also expected to continue to decrease due to the declining impact of COVID-19. However, overall business confidence declined from July’s position.
Source: Antara News