Indonesia's Manufacturing Index Strengthens to 51.2 in December 2024

S&P Global reported that Indonesia's manufacturing index, measured by the *Purchasing Manager's Index* (PMI), reached 51.2 points in December 2024. This score indicates expansion, as it is above 50 points.

This score is also an increase from November's 49.6 points, which was in the contraction phase (below 50 points). The research team's calculations show that the December 2024 PMI is the highest since May 2024.

"This increase in PMI is supported by a simultaneous increase in output and new orders. Production increased at a moderate overall rate, but at a faster pace than in November 2024," said Paul Smith, S&P Global's Director of Economics, in a report on Thursday (2/1/2025).

The latest data also marks the first growth in employment or new production in six months. According to the research team, overall market demand is reported to have strengthened, both domestically and internationally. Simultaneously, new export sales volumes increased slightly for the first time in less than a year.

"Companies helped meet the increased production and new order needs by increasing purchasing activity for two consecutive months," said Paul.

This growth, which has been increasing since May 2024, is not only useful for supporting current needs but also for future reserves. Input inventories increased at a moderate rate for two consecutive months in December 2024, and companies recorded a positive outlook for output and new orders in the coming month.

This also explains the equivalent increase in finished goods inventories, leading to optimism for the coming year. However, most companies still anticipate an increase in production next year.

Regarding employment, S&P Global stated that the number of staff or workers in December 2024 marked the first increase in staffing levels in three months.

"However, growth was only marginal, meaning that the level of outstanding work increased at a moderate rate for the first time since May 2024," said Paul.

In terms of prices, input price inflation remains high since November 2024, although below the long-term average. According to the S&P Global panel, the strengthening US dollar caused an increase in import prices.

"Pressure on the supply chain was also reported, with vendor performance declining for the first time in three months," said Paul.

Companies responded to the increase in input costs by raising prices for three consecutive months. The inflation rate is moderate, but still considered high, as recorded in the survey since August 2024.

(See also: [Purchasing Power Remains Weak, Indonesian Manufacturing PMI Only 49.6 in November 2024](https://databoks.katadata.co.id/ekonomi-makro/statistik/674f03b345d3c/daya-beli-masih-lemah-pmi-manufaktur-ri-hanya-496-per-november-2024))