Indonesias Manufacturing PMI Remains Expansive for 32 Consecutive Months Despite Long Eid Holiday

Jakarta, INTI - The expansion phase recorded by the domestic manufacturing industry continues, extending the period for 32 consecutive months. This is based on the report from S&P Global, indicating that the Purchasing Manager’s Index (PMI) for Indonesia's Manufacturing in April 2024 stood at 52.9.

"The growth condition of the manufacturing industry remains healthy and robust. Several companies have resumed purchasing activities and increased stocks to prepare for further growth in the coming months," said Minister of Industry Agus Gumiwang Kartasasmita in Jakarta on Thursday (5/2).

Agus explained that the PMI figure for Indonesia's manufacturing in April 2024 is quite encouraging and unexpected, considering that last month there was a national holiday for 10 days, unlike other countries. However, manufacturing activities in the country are still vibrant. "This is good news, meaning productivity continues to meet the needs of the domestic and export markets," he explained.

What is also encouraging, continued the Minister of Industry, is that Indonesia's manufacturing PMI remains solid and healthy amidst the geopolitical dynamics that pose challenges for all parties. The Manufacturing PMI for Indonesia in April 2024 managed to surpass the ASEAN Manufacturing PMI (51.0). It also outperformed the Manufacturing PMI of Thailand (48.6), Malaysia (49.0), Myanmar (49.9), Taiwan (50.2), Vietnam (50.3), the Philippines (52.2), China (51.4), Japan (49.6), South Korea (49.4), the United Kingdom (49.1), and the United States (50.0).

"Some countries that are our competitors in the manufacturing sector are still experiencing contractions such as Thailand, Malaysia, Japan, and South Korea. The 52.9 points are also above the ASEAN PMI average recorded at 51.0," said the Minister of Industry.

The expansion phase of the Manufacturing PMI in the fourth month aligns with the achievement of the Industrial Confidence Index (ICI) in April 2024, which stood at 52.3. According to the ICI report, the sub-sector most optimistic in the next six months is the paper and paper product industry, followed by the printing and recording media reproduction industry, and the food industry. The high level of optimism is due to business confidence in government policies and future improvements in the global economy.

"We remain focused on implementing strategic policies to realize competitive industries, namely through import substitution programs, Increased Use of Domestic Products (P3DN), and downstreaming of natural resources," explained the Minister of Industry.

On this occasion, the Minister of Industry reiterated that they are determined to continue to fight for all sectors to benefit from the Certain Natural Gas Price (HGBT) policy to boost their competitiveness. Therefore, the Ministry of Industry has sent an evaluation letter for the program to the Ministry of Energy and Mineral Resources (ESDM).

"We will always fight for HGBT. We all understand the benefits of HGBT. So, we hope the ESDM will soon issue a policy to provide HGBT in accordance with the Presidential Regulation," he said. Expanding the program to all manufacturing industries only requires 30 percent of the total domestic gas production.

"We want all sectors to benefit from HGBT, not just seven. But even seven is still chaotic," he added. The Minister of Industry also asked the relevant ministries to consider the cost and benefit of national interests holistically, which will benefit the nation as a whole.

Paul Smith, Director of Economics at S&P Global Market Intelligence, stated that overall, April was a positive month for Indonesia's manufacturing economy, with output and new orders rising since March at a reasonably good level amidst positive demand conditions. This has influenced companies to push purchasing activities and increase stocks as a precautionary measure for growth in the coming months.