Indonesia’s Manufacturing PMI Shows Expansive Level in June 2021

Based on the survey results released by HIS Markit, Indonesia’s Manufacturing Purchasing Managers Index (PMI) for June 2021 was still in the expansion zone at 53.5, indicating that the country’s manufacturing industry is considered expansive.

“We need to be grateful that the manufacturing industry sector is still considered expansive. This means that the business sector still shows enthusiasm amidst the surge in COVID-19 cases,” said Minister of Industry Agus Gumiwang Kartasasmita as quoted from the Ministry’s website, Friday (2/7).

Referring to the IHS Markit data, Indonesia’s Manufacturing PMI in June was still higher than that of its ASEAN peers at 49.0, outperforming the Philippines (50.8), Thailand (49.5), Singapore (46.5), Vietnam (44.1), Malaysia (39.9), China (51.3), Japan (52, 4), and India (50.8).

Minister of Industry also expressed optimism that the national economy will continue to grow in the second quarter of this year considering performance in the manufacturing industry sector along with a number of other indicators.

“In the past eight months, Indonesia’s Manufacturing PMI has continued to be above 50. This means that the domestic manufacturing industry is in an expansive, even aggressive, level. Industrial growth is also expected to reach a positive point in the second quarter of this year,” he explained.

The brilliant performance of the manufacturing industry sector can be seen in the export value of the manufacturing industry which was recorded at USD66.70 billion in January-May 2021, increasing by 30.53 percent compared to that of the same period in 2020.

With this achievement, the manufacturing industry contributed the highest at 79.42 percent of the total national exports which stood at USD83.99 billion.

“The large proportion of exports of processing industry products also illustrates that there has been a shift in Indonesia’s exports from primary commodities to manufactured products with a high added value. This means that Indonesia has carried out an economic transformation and is no longer an exporter of raw materials, but finished products or semi-finished goods,” said Agus.

In addition, during the first quarter of 2021, investment value realized by the processing industry reached Rp88.3 trillion, increasing by 38 percent compared to that of the achievement in the same period the previous year.

Of the Rp88.3 trillion, the manufacturing sector contributed significantly to 40.2 percent of the total investment value in Indonesia which reached Rp219.7 trillion.

“This indicates that in the midst of the COVID-19 pandemic, Indonesia remains attractive for investment with its large market, abundant resources, economic growth and regulatory support from the Government. Investment is also one of the driving forces for national economic growth and at the same time will provide employment in the industrial sector,” Agus said. (PR of Ministry of Industry/UN) (EST/EP)