Manufacturing PMI Hits Record High of 57.2 in October 2021

The Indonesian manufacturing sector is experiencing a resurgence. This is evident from the record-high Purchasing Managers' Index (PMI) for Indonesian manufacturing. The Indonesian Manufacturing PMI reached 57.2 in October 2021, up from 52.2 in September 2021.

IHS Markit stated that this indicates increasingly expansive activity in Indonesian manufacturing. Furthermore, employment levels rose slightly for the first time in four months, and purchasing activity recorded the sharpest expansion on record.

The increase in the Indonesian manufacturing PMI was driven by increases in new employment and output in October 2021. However, foreign demand remained contracted.

In line with strengthening overall demand, manufacturing companies increased their workforce for the first time in four months, although the increase was relatively small. Companies also increased purchasing activity in October 2021.

Meanwhile, supply shortages and delivery issues from suppliers resulted in extended order fulfillment times in October 2021. Manufacturing companies reported supply shortages leading to price increases. Input price inflation rose along with rising raw material costs. As a result, companies passed on higher costs to consumers.

Business sentiment improved last month. The hope is that business conditions will continue to improve as the impact of the pandemic on the manufacturing sector diminishes.