Jakarta: The headline seasonally adjusted S&P Global Indonesia Manufacturing Purchasing Manager’s Index™ (PMI™) posted at 51.7 in August 2022, up from 51.3 in July 2022.
The above 50.0 PMI reading meant that overall operating conditions across Indonesia's manufacturing sector have now improved in each of the past 12 months. Despite only being mild, the rate of improvement was the strongest in four months.
"Manufacturers in Indonesia registered a stronger improvement in overall business conditions in August, according to latest PMI survey data. More pronounced growth in both output and total new orders was an encouraging sign for the future health of the economy, with firms frequently mentioning firmer underlying demand conditions," said Laura Denman, Economist at S&P Global Market Intelligence, in a press release on Thursday.
"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," Denman added.
Furthermore, overall business sentiment across the Indonesian manufacturing sector remained strongly positive amid hopes for a sustained recovery in demand.
Despite this, the overall degree of confidence did ease from July and remained below the historical average.
"However, despite August data displaying obvious signs of economic growth across Indonesia’s manufacturing economy, overall business confidence did ease from July and remained below the historical average," Denman concluded.
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