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Indonesia sees faster manufacturing sector expansion in April

Jakarta Globe - May 4, 2022

Jakarta – Indonesia's manufacturing sector expansion has accelerated in April thanks to improving economic activities that spur employment and purchasing activity, according to the latest S&P Global Purchasing Manager Index, or PMI, data.

Indonesia's S&P Global Indonesia manufacturing PMI rose to 51.9, increasing from 51.3 in March and marking the ninth consecutive month of the country's manufacturing sector expansion. A reading above 50 reflects an expansion from the previous month, and conversely, below 50 signals a contraction.

That was also the quickest rate of development since January, as the country dropped off restrictions after the Covid-19 third wave, driven by the Omicron variant, subsided.

"The expansion of Indonesia's manufacturing sector continued in April and at a stronger pace," Jingyi Pan, an economics associate director at S&P Global, said in a statement on Wednesday.

"An improvement in economic conditions was reflected by stronger upturns in both demand and production, which was a positive sign," Pan said.

In April, manufacturing production rose quicker, boosted by growing client demand.

While the increase in output was slight, it was the quickest in three months, while new orders also increased since March. Globally, foreign demand increased steadily. However, several enterprises indicated that the situation in Ukraine weighed on total new foreign business.

"That said, supply issues persisted with longer lead times reported even as Covid-19 disruptions appeared to have eased in April," Pan said.

Still, Pan warned against price pressures, which worsened last month and could strain production moving forward.

"At the same time, business confidence fell sharply over April, and it will be worth monitoring the impact of higher inflationary pressures. With that said, the increase in purchasing activity and, importantly, the solid expansion of workforce numbers continued to reflect some confidence from firms for the near-term," Pan said.

Source: https://jakartaglobe.id/business/indonesia-sees-faster-manufacturing-sector-expansion-in-apri