Indonesia's Manufacturing Industry Performance Improved in Q1 2022

Bank Indonesia (BI) recorded an increase in the performance of the manufacturing industry in the first quarter of 2022. This is reflected in the Bank Indonesia Prompt Manufacturing Index (PMI-BI), which reached 51.77%, higher than 50.17% in the fourth quarter of 2021, and is in the expansion phase (index > 50).

This increase in the PMI-BI is in line with the development of business activities in the manufacturing industry in the first quarter of 2022 and the forecast for the second quarter of 2022 based on the Business Activity Survey (SKDU).

The weighted net balance (SBT) of manufacturing business activities from the SKDU in the first quarter of 2022 was recorded at 0.84%. In the second quarter of 2022, the SBT value is expected to increase to 4.97%.

BI explained that the increase in the PMI-BI was driven by a number of increasing activities following the easing of community activity restrictions (PPKM), thus boosting optimism and driving consumer demand.

Based on its constituent components, the increase in the PMI-BI in the first quarter of 2022 occurred in the majority of components, especially the total order volume, production volume, and finished goods inventory volume components.

Production volume increased and was at an expansion level with an index of 53.81% in the first quarter of 2022, higher than 51.84% in the previous quarter.

In line with this, the index of the input goods order volume component also increased from 51.67% to 54.33%. The volume of finished goods inventory increased from 51.42% to 53.59%.

Furthermore, by subsector, increases occurred in the majority of subsectors, with the highest index in the paper and printing subsector at 56.36%, the food, beverage, and tobacco subsector at 53.47%, and the textile, leather, and footwear subsector at 53.29%.

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