Will the Steam of Manufacturing Sector Last Through Year-end?

Indonesia's manufacturing activity improved in July 2022 as production and demand increased. The latest survey by S&P Global released on Monday revealed that Indonesia's manufacturing Purchasing Managers' Index (PMI) gauge climbed to 51.3 in July 2022 from 50.2 a month earlier. Manufacturing activity growth is at a three-month high.

New orders increased after a low in June. The businesses said improved production occurred in line with growing demand from consumers. While export demand is still weak, domestic demand can offset increased new orders. Declining exports were even at their lowest since August last year.

Sian Jones, Senior Economist at S&P Global Market Intelligence, said that Indonesia's manufacturing sector growth momentum rebounded. Higher demand, especially from domestic consumers, led to increased production, encouraging businesses to open new jobs. Another good news is that input cost pressures eased marginally in July. "Production costs have increased, but at the lowest rate in more than a year. However, the risk of price pressures still exists, particularly on the energy and raw materials," Jones said in a written statement.