JAKARTA (TheInsiderStories) – Indonesia’s manufacturing industry is showing aggressive performance in February 2018, with its efforts to increase expansion and employment.
Based on the Purchasing Managers’ Index (PMI) released by Nikkei and Markit, Indonesia’s manufacturing PMI rose from 49.9 in January to 51.4 in February 2018, after below neutral point during December 2017.
Indonesia’s manufacturing PMI performance in February 2018 also showed the highest position in the operational condition in 20 months or since June 2016.
Polls of some purchasing managers at Indonesian manufacturing firms by the Nikkei showed the industry is gaining new jobs as it is generally associated with rising domestic demand.
With the increase in production, the company was able to raise the payroll for the first time in 17 months.
Furthermore, the employment growth rate is the second highest recorded during the survey. Simultaneously, the company also has sufficient resources to ensure the order is completed on time.
In the survey, the company is still confident that output will increase in the coming period, although this sentiment is relatively weak compared to long-term trend.
“The improvement in conditions in the domestic market brushed off a small drop in overseas demand for Indonesian products, with new orders and production increased for the first time since late November,” said Aashna Dodhia, an economist at IHS Markit, who compiled the survey results.
Referring to data from the Ministry of Industry, during the period of 2015-2017, the number of medium and medium industrial enterprises has increased significantly, reaching 4,433 business units until the second quarter of 2017, compared to the year 2014 of 1,288 business units. The increase is targeted to continue in the next two years to 8,488 units by the end of 2019.
Meanwhile, the number of employment in the industry in the period 2015-2017 increased from 15.39 million people in 2014 to 16.57 million people until the second quarter of 2017 and is targeted to continue to grow to 17 million people until the end of 2019, one million workers will be absorbed by the national industry.
In line with the increase in the number of business units and employment, the investment value of the industrial sector also increased to Rp706.9 trillion in the period 2015-2017 compared to 2014 which reached Rp195.6 trillion (US$14.1 billion)
The value of this investment is predicted to continue to increase again to reach Rp1,759 trillion ($127 billion) in the next two years period.