Manufacturing Industry Performance Improves in Q3 2022: Here's What Drove It

The performance of the manufacturing industry showed slight growth in the third quarter of 2022. This is reflected in the Bank Indonesia Manufacturing Index (PMI-BI) for Q3 2022, which recorded 53.71%, indicating expansion (index > 50%), an increase from 53.61% in the previous quarter.

According to Bank Indonesia (BI) records, this increase was driven by PMI-BI components, particularly production volume, finished goods inventory volume, and employment. This increase occurred in most sub-sectors, with the highest index in the Cement & Non-Metallic Minerals sub-sector (58.91%), the Iron and Steel Basic Metals sub-sector (56.62%), and the Paper and Printing sub-sector (55.63%).

This PMI-BI development aligns with the positive and increasing performance of the manufacturing sector in Bank Indonesia's Business Activity Survey (SKDU), which recorded a Weighted Net Balance (WNB) of 3.18%.

In the fourth quarter of 2022, the manufacturing sector's performance is projected to remain strong and in the expansion phase, although not as high as in the previous quarter. The PMI-BI for Q4 2022 is projected at 53.18%, slightly lower than the 53.71% in Q3 2022.

Several components, such as total order volume, production volume, finished goods inventory volume, and input order receipts, are projected to remain in the expansion phase. Several sub-sectors are expected to increase, particularly the Iron and Steel Basic Metals sub-sector (58.54%) and the Fertilizer, Chemical & Rubber Goods sub-sector (52.37%).

Meanwhile, the Transportation Equipment, Machinery & Equipment sub-sector (49.63%) is recorded as experiencing contraction.