Business conditions have now strengthened in six successive months. Central to the marked improvement in business conditions was a surge in new orders. New business expanded substantially, and at by far the fastest pace since the survey began in April 2011.
Firms often cited improvements in customer demand. Moreover, total new orders were boosted by a return to growth of new business from abroad. Exports increased for the first time in 17 months.
With new business expanding sharply, Indonesian manufacturers also increased their production volumes. As was the case with new orders, the rise was the steepest on record. A record rise in purchasing activity was also registered as firms responded to new order inflows.
Meanwhile, suppliers' delivery times were broadly unchanged in April, in a sign that recent supply-chain disruption has begun to ease. This helped firms to expand their stocks of purchases, thereby ending a 15-month sequence of declining pre-production inventories. Stocks of finished goods, meanwhile, continued to fall marginally.
"Somewhat disappointingly given the strength of new order growth, firms still appeared reluctant to take on extra staff. Given the subsequent build-up of backlogged work, however, manufacturers will hopefully feel confident enough to start expanding workforce numbers in the months ahead," IHS Markit Economics Director Andrew Harker said in a press release on Monday.
There was again widespread optimism that output will continue to rise over the coming year, with some three-quarters of panellists forecasting an expansion.
Confidence was centred on hopes that the covid-19 pandemic will come to an end over the coming year, enabling further increases in new orders.