PMI Manufacturing in Indonesia Slumps Again in November 2021

Indonesia's Manufacturing Purchasing Managers' Index (PMI) stood at 53.9 in November 2021, a 5.8% decrease from the previous month's 57.2.

Despite the decline, the manufacturing index remains in expansionary territory, as it is above 50. This expansion is driven by the diminishing threat of the Delta variant of Covid-19.

IHS Markit explains that Indonesian manufacturing production has expanded for three consecutive months. Similarly, output has also expanded for three consecutive months, supported by increased demand. However, the November 2021 expansion in output and production was lower than in October 2021.

Furthermore, foreign demand has declined for five consecutive months due to a lack of foreign orders and low inventory levels.

Employment levels increased as manufacturing companies expanded their workforce in line with production. However, increased demand and delivery bottlenecks led to a rise in outstanding business.

In terms of pricing, there was an increase in input prices and output costs in November 2021. Overall business sentiment remains positive, although it fell to its lowest level in 18 months.