Indonesia’s Manufacturing Business Performance Hits Seven-Month High

The biggest economy in the ASEAN bloc, Indonesia, recorded a solid improvement in manufacturing business conditions in April with the fastest growth in new orders since September 2022, the S&P Global Indonesia Manufacturing PMI™ survey showed on 2 May.    

The S&P Global Indonesia Manufacturing PMI is compiled by S&P Global from responses to questionnaires sent to purchasing managers in a panel of around 400 manufacturers in Indonesia.

The headline seasonally adjusted S&P Global Indonesia Manufacturing Purchasing Manager’s Index™ (PMI) rose to 52.7 in April, up from 51.9 in March, for the twentieth consecutive month of expansion. The index reading in April signalled the strongest overall business performance since September 2022, S&P Global said.

Cost inflation in Indonesia’s manufacturing sector eased to a 29-month low as business expenses rose by the smallest percentage since November 2020.

In addition, manufacturers anticipate production volumes to continue increasing over the next year, with this index picking up for the second month running, and pointing to the strongest degree of business optimism since November 2022. Survey respondents often cited rising confidence regarding the near-term outlook for customer demand.

“The manufacturing sector continued to gain momentum after a relatively subdued start to 2023,” Tim Moore, Economics Director at S&P Global Market Intelligence, said, commenting on the survey.

“The overall rate of input price inflation resumed its downward trend in April and was the lowest for nearly two-and-a-half years. This should help relieve pressure on operating margins, especially against the prevailing backdrop of only modest rises in factory gate prices,” Moore added.