Jakarta: The headline seasonally adjusted S&P Global Indonesia Manufacturing Purchasing Manager’s Index™ (PMI™) posted 51.3 in July 2022, up from 50.2 in June 2022.
According to the latest PMI™ data from S&P Global, operating conditions across the Indonesian manufacturing sector improved at the strongest pace for three months in July.
The overall upturn was supported by quicker increases in output and new orders, as greater domestic client demand spurred growth.
New export orders, however, continued to decline.
In line with stronger demand conditions, manufacturers expanded workforce numbers at the sharpest pace in over eleven years of data collection.
Firms were also more upbeat in their expectations for output over the coming year, as confidence reached the highest since April.
Inflationary pressures eased at the start of the third quarter, with input costs and output charges both rising at the slowest pace for over a year.
"The Indonesian manufacturing sector regained growth momentum in July, with output and new orders both rising at faster rates. Greater client demand wasfocussed on the domestic market, however, as foreign sales fell at the sharpest pace for almost a year," Sian Jones, Senior Economist at S&P Global Market Intelligence, said in a press release on Monday.
"Increased new business spurred firms on to expand their workforce numbers, as the rate of job creation accelerated to the steepest on record. Encouragingly for manufacturers, July saw a softening of price pressures. Cost burdens and selling prices both rose at the slowest rate for over a year, relieving some concerns held by firms. That said, upside risks to price rises remain, as fuel and material costs continue to drive inflation," Jones added.
At the same time, manufacturers registered a stronger degree of optimism regarding the outlook for output over the coming 12 months.
Greater expectations were supported by hopes of price stability and increased new orders.
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