Jakarta: Indonesia’s manufacturing sector continued to expand at the end of 2022, according to the latest S&P Global Indonesia Manufacturing Purchasing Manager’s Index™ (PMI) data.
The headline seasonally adjusted PMI rose to 50.9 in December, up from 50.3 in November.
Having posted above the 50.0 no-change mark, the headline PMI was consistent with a sixteenth consecutive monthly improvement in the health of Indonesia’s manufacturing sector.
The rate of growth was the strongest seen since October, albeit marginal overall.
"December’s PMI data pointed to improved conditions within the Indonesian manufacturing sector at the end of 2022. Quicker expansions in output and sales alongside easing price pressures were welcomed developments, though upturns in production and demand remained subdued overall. Notably, output price inflation fell to the lowest since May 2021, suggesting that price pressures for end clients have now receded to the lowest in over one-and-a-half years and may be supportive of future increases in demand," said Jingyi Pan Economics Associate Director at S&P Global Market Intelligence, in a media release on Monday, January 2, 2023.
"Moreover, renewed growth in inventory levels, underpinned by better demand conditions, were signs of a turnaround for the sector," Pan added.
That said, the only sentiment-based PMI sub-index, the Future Output Index, pointed to the weakest level of business confidence since the initial phase of the pandemic in May 2020, which suggests greater uncertainty within the manufacturing sector.
S&P Global Market Intelligence currently expect Indonesia’s economic growth to reach 4.4% in 2023 after a 5.2% expansion in 2022.
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