Indonesia’s manufacturing purchasing managers’ index rises to expansionary level of 51.3 in July

3 August 2022

The expansive level of Indonesia’s PMI has been recorded since September 2021 or for 11 consecutive months, even surpassing several other ASEAN countries such as Vietnam (51.2), the Philippines (50.8), Malaysia (50.6), and Myanmar (46. 5).

Jakarta (Indonesia Window) – Indonesia’s economic activity continues to show an accelerating trend of recovery, as reflected in Indonesia’s manufacturing Purchasing Managers’ Index (PMI) in July 2022 which was again recorded at an expansive level of 51.3, or higher than that in June 2022 which was booked at 50.2.

“Of course, this achievement is inseparable from the role of various parties in the process of accelerating the recovery of economy after the COVID-19 pandemic, especially in growing the domestic demands and supporting business activities,” Coordinating Minister for the Economy Affairs Airlangga Hartarto said in an official statement received here on Wednesday.

Airlangga said that the impressive performance in real sector activities was proof of the resilience of the domestic economy in the midst of ongoing global challenges. In fact, this performance was achieved in the midst of a potential slowdown in the global recovery.

Based on a survey, the expansion rate of Indonesia’s manufacturing PMI experienced the highest rate of growth since April 2022, generally supported by increasingly solid domestic demand.

The increasingly vibrant real sector activity was also confirmed by the results of the Business Activity Survey in the second quarter of 2022. This was reflected in the Weighted Net Balance (WNB) of 14.13 percent, higher than the WNB in the first quarter of 2022 of 8.71 percent.

In addition, the strengthening of output capacity in various sectors contributed to the increase in the value of Indonesia’s exports.

Cumulatively, the value of Indonesia’s exports for the January-June 2022 period reached 141.07 billion U.S. dollars or grew by 37.11 percent. This achievement on the export side supports Indonesia’s trade balance, which has consistently experienced a surplus for 26 consecutive months.

Coordinating Minister Airlangga emphasized that the government will continue to encourage the rise of production activity, especially in sectors that have a large multiplier impact.

“In addition, the simplification of various regulations is also continuously pursued as a form of the government’s commitment to improving the ease of doing business in Indonesia,” the senior minister said.

In addition, various macroeconomic indicators that are getting better have made Indonesia an investment destination for various countries.

Until the second quarter of 2022, investment realization reached 302.2 trillion rupiahs (20.2 billion U.S. dollars), an increase of 35.5 percent (yoy), and created jobs for 320,534 people.

Inflation in Indonesia is also still relatively under control in the midst of a significant increase in inflation in various countries. In July 2022 inflation was recorded at 0.64 percent (month-to-month/mtm), 3.85 percent (year-to-date/ytd) and 4.94 percent (year-on-year/yoy).

Reporting by Indonesia Window