Indonesia’s Manufacturing Sector Books Stellar Growth in March

Operating conditions in Indonesia’s manufacturing industry saw in March the fastest improvements in nearly two and a half years as growth in new orders and output accelerated, the S&P Global Indonesia Manufacturing Purchasing Manager’s Index (PMI) showed on 1 April.  

The headline seasonally adjusted manufacturing PMI in ASEAN’s largest economy jumped to 54.2 in March from 52.7 in February, driven by strong performance in three of its five subcomponents: new orders, output, and stocks of purchases, according to the index which S&P Global compiled from responses of purchasing managers in a panel of around 400 manufacturers.

Indonesia’s manufacturing firms saw the fastest increase in new order inflows since August 2023, thanks to favourable demand trends and new client wins. As new orders grew, companies ramped up production, with the rate of output expansion at its strongest reading since December 2021, S&P Global said.

As a result of stronger demand, Indonesian manufacturing firms looked to rebuild their inventories in March and bought additional materials, helping buying levels in the sector jump.

“To accommodate for buoyant demand and rising production requirements, firms acquired inputs to the greatest extent in over two years, which in turn underpinned a record upturn in stocks of purchases,” S&P Global said, commenting on the results of the PMI survey.

“Indonesia’s manufacturing industry enjoyed a stellar performance in March, with output growth hitting its highest in 27 months due to a notable rise in domestic demand for goods,” said Pollyanna De Lima, Economics Associate Director at S&P Global Market Intelligence.