The IHS Markit Indonesia Manufacturing Purchasing Managers’ Index™ (PMI™) posted 55.3 in May, up from 54.6 in April and registering a new survey-record high for the third successive
Business conditions have now strengthened in seven successive months
According to th report, new orders, output and purchasing all rose at rates unprecedented in the ten-year survey history while employment returned to growth after 14 months to meet the rising operating capacity needs.
Nevertheless, supply constraints continued to be reflected by a lengthening of lead times, resulting in sustained input cost and output charge inflation in Indonesia.
"Indonesia’s manufacturing sector expanded at a record pace in May, according to the IHS Markit Manufacturing PMI. Companies signalled robust demand and output improvements, while the first increase in employment in 15 months was also an encouraging sign," said IHS Markit Economics Associate Director Jingyi Pan in a press release issued on Wednesday.
"Supply constraints remain an outstanding issue, feeding into higher prices experienced across the manufacturing sector. As a result of delivery delays, depletion of inputs was seen despite a record ramping up of purchases," she stated.
Overall, firms retained a positive outlook with regards to production.
Almost three-quarters of survey respondents continue to expect production to rise in the next 12-month period, pinning hopes of an improvement in economic conditions on an improvement in the COVID-19 situation.
"Overall, firms remain broadly positive with regards to future output with hopes of improving COVID-19 conditions. It will be important for the pandemic situation to stay under control, especially with outbreaks in the Asia region and post the Idul Fitri holidays, so as not to derail the ongoing recovery," Pan concluded.