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Indonesia PMI December 2021

Indonesia: Manufacturing PMI declines in December

The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) dropped to 53.5 in December from November’s 53.9. However, the index remained comfortably above the 50-threshold, signaling another improvement in business conditions from the previous month.

December’s reading was underpinned by a softer expansion in new orders. Moreover, employment levels stagnated. However, the increase in output was the third fastest on record, while exports rebounded. On the price front, input cost inflation rose to an over eight-year high amid increased raw material costs and shipping fees, which translated into a further, albeit somewhat softer, increase in output prices.

Commenting on the release, Jingyi Pan, economics associate director at IHS Markit, stated:

“Persistent supply constraints remain a key concern for the Indonesian manufacturing sector, as vendor performance deteriorated further and companies reported steeper price pressures, which had affected production at some firms. It will be important to monitor if this continues to affect production, or even affect the current growth momentum moving forward.”

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