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Indonesia PMI January 2022

Indonesia: Manufacturing PMI improves in January amid stronger external demand

The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 53.7 in January from December’s 53.5 and marked the fifth consecutive month of improving conditions. Thus, the index remained comfortably above the 50-threshold, signaling another improvement in business conditions from the previous month.

January’s reading was mainly driven by a noticeable improvement in external demand amid a record rise in sales abroad. This, is turn, led to stronger expansion in new orders and output. Moreover, in order to keep up with the rise in demand, staffing levels increased. On the price front, input cost inflation eased from the eight-year high figure logged in December, but nevertheless remained elevated amid higher prices for raw materials and transportation. Lastly, business confidence over the coming year remained positive, but stumbled to a 36-month low amid the Omicron-led surge in Covid-19 cases.

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

“Operating conditions in the Indonesian manufacturing sector improved at the start of 2022 […]. Client demand expanded at a sharper rate, supported by record growth of new orders from abroad. Meanwhile, higher employment levels and purchasing activity were also seen, altogether reflecting better economic conditions.”

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