Indonesia Manufacturing PMI Rises to Level 54.2 in March

MANUFACTURING - JAKARTA. S&P Global reports that the Purchasing Manager's Index (PMI) for Indonesian Manufacturing in March 2024 is at 54.2. This figure is up 1.5 points compared to the achievement in February 2024, which was at 52.7.

This increase is supported by a rise in new demand, where companies also increased production volume. The rate of expansion is considered sharp and is the strongest in 27 months.

Report data shows that the total order increase was driven by the domestic market, while demand from abroad contracted after stagnating in February.

"The Indonesian Manufacturing Industry enjoyed its best performance in March, with output growth reaching the highest position in 27 months driven by a large increase in domestic demand," said Economics Associate Director of S&P Global Market Intelligence, Pollyanna De Lima, in her official statement, Monday (1/4).

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However, Pollyanna said that the negative impact of this sharp increase is that price pressure is gaining momentum. Strong input demand caused further price list adjustments on the supplier side, with cost inflation accelerating in a year and a half.

"This is driving the fastest increase in selling price increases in 21 months as goods manufacturers can easily pass on additional cost burdens to clients," she said.

While some companies are confident that demand will continue to improve in the coming months, some other companies are doubtful that this condition can last longer.

"Some companies are preparing to buy inputs and build inventories, but are reluctant to recruit additional employees because capacity pressure is still small for now," Pollyanna explained.