Indonesia’s manufacturing industry expands during pandemic

Jakarta (Indonesia Window) – Indonesia’s Manufacturing Purchasing Managers Index (PMI) continues to be at an expansionary level, raising optimism that the country’s manufacturing industry will grow positively, approaching 4 percent in 2021.

It was conveyed by Minister of Industry Agus Gumiwang Kartasasmita in a written statement here on Thursday (Jan. 14), adding that in December 2020, Indonesia’s Manufacturing PMI was at the level of 51.3, an increase compared to 50.6 in the previous month.

An index reading above 50 indicates expansion, while that below 50 shows contraction.

Level 51.3 is the highest achievement in Indonesia’s history during IHS Markit, a data provider agency based in London, England, conducted a survey in industrialized countries.

“For two consecutive months, Indonesia’s Manufacturing PMI has entered an expansionary phase. Of course, there are several reasons, one of which is the confidence of industrial players that there is a reborn from domestic consumption,” Agus Gumiwang said.

According to him, the COVID-19 mass vaccination, which began on Thursday (Jan. 14), also fosters high confidence from industrial players to boost the production process.

In addition, the central bank of Bank Indonesia noted that business activities in the manufacturing industry began to expand, and is predicted to continue improving in the first quarter of 2021.

It was reflected from Bank Indonesia’s Prompt Manufacturing Index ​​in the fourth quarter of 2020 which reached 47.29 percent. This achievement was much higher than the previous two quarters, which amounted to 45.64 and 44.91 percent respectively.

In terms of investment value, Agus Gumiwang noted a growing in the industrial sector during January-September 2020 period at 37 percent compared to the same period in 2019.

“Also, exports of manufactured products have also increased significantly. This condition brings hope for economic recovery in 2021,” he said.

Reporting by Indonesia Window