Indonesia’s Manufacturing PMI Hits Record High at 53.2

Source: Bureau of Press, Media, and Information of Presidential Secretariat

Indonesia’s manufacturing Purchasing Managers’ Index (PMI) soared to 53.2 in March 2021, reflecting that the country’s non-oil and gas processing industry progressed toward economic recovery in the first quarter this year.

The index increased by 2.3 points from 50.9 in February 2021, the highest record in the last 10 years since the survey began in April 2011.

“This is the result of industry players’ hard work. Meanwhile, the Government went all out to support them. It is proven by Indonesia’s increasing PMI for five months in a row,” Minister of Industry Agus Gumiwang Kartasasmita said in Jakarta, Thursday (01/04).

The Minister added that while the COVID-19 pandemic hit Indonesia’s economy, the Government has made policies and stimuli to revive businesses.

“Amid a difficult period, this significant increase shows that Indonesia’s economy will rebound sooner,” he remarked.

The Minister also said that in ASEAN region, Indonesia recorded the best performance in the last five months and it was expected to boost the economic growth in the first quarter of 2021, adding that the Government has given various stimuli so that the manufacturing sector expands rapidly and continues to show a positive growth.

One of the stimuli, he added, is a fiscal incentive, namely lower luxury goods tax borne by the Government for motorized vehicles.

“This policy has been proven to boost the confidence of industry players and improve the people’s purchasing power,” he said.

For the record, to boost sales of domestically manufactured motorized vehicles, the Government has granted a relaxation on luxury goods tax borne by the Government from 1 March to 31 December 2021 for four-wheeled vehicles with engine capacity up to 1,500 cc. The policy also applies to vehicles with engine capacity of 2,500 cc as of 1 April.

By the end of March 2021, there has been a quite significant increase in sales of four-wheeled vehicles with engine capacity up to 1,500 cc. It rose by 140 percent from the sales in February 2021.

“With the implementation of the policy on the relaxation of luxury goods tax borne by the Government, 102,000 units out of 152,000 units of vehicles with four wheels or more produced in January-February 2021 were sold in the same period,” the Minister said.

In the meantime, Economic Director of HIS Markit Andrew Harker underscored three important points regarding Indonesia’s significant PMI increase in March 2021, namely the most drastic increase in output and new demands in a decade, stable employment, and the fastest increase in input since October 2018.

“The manufacturing sector in Indonesia ended the first quarter of the year in a high note. Companies boosted their production to respond to the strongest new demands in a decade of survey,” he said, adding that the there is an improvement record of the health sector pushed by new demands and output.

“Thus far, both experienced the highest growth in a decade of survey period. The production has soared for five months in a row, with panelists in general relating the most recent expansion with new demands,” he added.

Previously, Indonesia’s manufacturing PMI in January 2021 surpassed the manufacturing PMI of Vietnam (51.3), Thailand (49.0), and Malaysia (48.9).

Meanwhile, ASEAN’s manufacturing PMI in the beginning of the year is at 51.4. In fact, the manufacturing PMI of China decreased to 51.3 from 51.9 in the previous month. (PR of Ministry of Industry/UN) (DH/EP)

The official website of Ministry of Industry can be accessed through this link.