JAKARTA (TheInsiderStories) – Growth in the Indonesian manufacturing sector accelerated again in April, with the Purchasing Manufacturing Index (PMI) hitting a new record high for the second month. Based on IHS Markit data, the country’ PMI improved to 54.6 in April, up from 53.2 in March.
“Indonesian manufacturing production continued to ramp up in April amid super strong expansions of new orders. Encouragingly, total new business was supported by a first rise in exports since the COVID-19 pandemic hit as international demand shows signs of improvement,” said Andrew Harker, economics director at IHS Markit at the report.
Output, new orders and purchasing all rose at rates that were unprecedented in the ten-year survey history, while new export orders returned to growth following a 16-month period of decline, said the agency. Firms were still reluctant to take on extra staff, however, leaving employment levels broadly unchanged despite sharply rising new orders.
As a result, said the report, backlogs of work accumulated for the second month. Business conditions have now strengthened in six successive months. Central to the marked improvement in business conditions was a surge in new orders. New business expanded substantially, and at by far the fastest pace since the survey began in April 2011.
Firms often cited improvements in customer demand. Moreover, total new orders were boosted by a return to growth of new business from abroad. Exports increased for the first time in 17 months. With new business expanding sharply, Indonesian manufacturers also increased their production volumes. As was the case with new orders, the rise was the steepest on record.
A record rise in purchasing activity was also registered as firms responded to new order inflows. Meanwhile, suppliers’ delivery times were broadly unchanged in April, in a sign that recent supply-chain disruption has begun to ease. This helped firms to expand their stocks of purchases, thereby ending a 15-month sequence of declining pre-production inventories.
Stocks of steep new order growth helps drive rise in production first expansion of new export orders in 17 months. And, backlogs of work increase as employment levels remain broadly stable.
“Somewhat disappointingly given the strength of new order growth, firms still appeared reluctant to take on extra staff. Given the subsequent build-up of backlogged work, however, manufacturers will hopefully feel confident enough to start expanding workforce numbers in the months ahead,” he concluded.
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