Indonesia: Manufacturing PMI rises to highest level since October 2021 in March
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) rose to 54.2 in March—the highest since October 2021—from 52.7 in February. As a result, the index moved further above the 50.0 no-change threshold and signaled a faster improvement in manufacturing sector operating conditions compared to the previous month.
March’s data highlighted marked growth in Indonesia’s manufacturing sector, driven by faster gains in output and new orders. This, in turn, led to a significant increase in buying levels, the strongest in over two years, which fed into a record upturn in stocks of purchases. However, capacity pressures remained mild, and there was broadly no change in employment levels.
Prices and business sentiment in March saw notable changes. Input inflation was the highest in a year and a half, boosted by unfavorable exchange rate movements. In addition, the rate of output inflation reached a 21-month high, outpacing its long-run average, with demand strength allowing firms to pass on cost rises to clients. However, business sentiment weakened to the lowest in over a year, dampened by concerns over the sustainability of the current trend of robust sales growth.