Indonesia's Manufacturing Sector Records Sharp Growth in March 2024
The headline seasonally adjusted S&P Global Indonesia Manufacturing Purchasing Manager’s Index (PMI) climbed to 54.2 in March 2024.
IDXChannel - The headline seasonally adjusted S&P Global Indonesia Manufacturing Purchasing Manager’s Index (PMI) climbed to 54.2 in March 2024 from 52.7 in the previous month, highlighting the fastest improvement in operating conditions in nearly two-and-a-half years.
According to data gathered by S&P Global, the upward movement in the headline figure reflected stronger readings for three of its five subcomponents: new orders, output and stocks of purchases.
"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, in a media release on Monday (1/4/2024).
Companies observed the quickest increase in new order inflows since August 2023. Buoyed by the upturn in new orders, firms scaled up production volumes. To fulfil rising sales and greater production requirements, manufacturers in Indonesia sought to rebuild their inventories by acquiring additional materials.
"The sting in the tail of this sharp upturn however is that price pressures gained momentum. Robust demand for inputs led to further price list adjustments at suppliers, with cost inflation accelerating to the strongest in a year-and-a-half. This fuelled the quickest increase in selling prices for 21 months as goods producers were comfortably able to pass additional cost burdens through to clients," De Lima explained.
"While firms were confident that demand will remain favourable in the coming months, some doubted that such strength could be sustained on a longer horizon. Several businesses were prepared to acquire inputs and rebuild inventories, but less willing to recruit additional workers as pressures on capacity remained mild for now," De Lima concluded. (WHY)