Indonesia’s Manufacturing Sector Continues To Expand

Indonesia’s Manufacturing Sector Continues To Expand


The manufacturing sector in ASEAN’s biggest economy, Indonesia, expanded further in September, thanks to higher demand and improved vendor performance, according to the latest S&P Global Indonesia Manufacturing Purchasing Manager’s Index™ (PMI). 

The headline seasonally adjusted PMI was at 52.3 in September, down from 53.9 in August, but still posting well above the 50.0 mark. Readings below the no-change mark 50.0 signal contraction, while those above it suggest the manufacturing sector continues to expand. The latest reading in September showed that Indonesia’s manufacturing output and conditions in the industry improved for a 25th month in a row, S&P Global Market Intelligence said.

The improved demand prompted manufacturers to increase their volume of input buying and inventory holdings.

Employment levels also increased, enabling firms to reduce their backlogged orders. Despite higher prices in both input and output, the rates of inflation remained below their respective averages.

Production in the Indonesian manufacturing sector rose for a sixteenth consecutive month in September.

Demand improved and new orders from abroad continued to increase, at a slightly faster pace in September amid reports of strengthening client demand across key export markets, according to S&P Global Market Intelligence’s survey of purchasing managers in a panel of around 400 manufacturers.

“Although there are some indications of growth momentum moderating, the rates of output and new order growth remained solid overall. Furthermore, business confidence rose during September,” Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said, commenting on the survey.

“These suggest that conditions in the sector may further improve in the near term.”