JakartaPost-Dec 1
Indonesia’s manufacturing sector continued to improve for the fourth month in a row, supported by strong domestic demand as exports declined to their weakest point in years, weighing on the industry amid a monthslong slump. Based on a survey of purchasing executives from around 400 manufacturing companies across Indonesia, the Purchasing Managers’ Index (PMI) report published by S&P Global on Monday shows the index rising to 53.3 in November, up from 51.2 the preceding month. This marks the fourth consecutive month in which the index has remained above the 50-point threshold that separates expansion from contraction. S&P Global Market Intelligence economist Usamah Bhatti wrote in the report that the headline PMI signified “a positive month for the health of the Indonesian manufacturing economy”. He said renewed expansion in production was occurring at the quickest pace since August 2023. “Firms responded to higher workloads by raising purchasing levels and employment, while also recording signs of pressure on capacity with the most pronounced increase in backlogs since September 2021,” Bhatti said. The report noted that the domestic economy was the principal driver of this year’s demand, as export orders have been consistently declining and reached “the most pronounced” weakening in the past two years in November. Statistics Indonesia (BPS) revealed on Monday that exports slowed by 2.31 percent year-on-year (yoy) in October due to dropping coal shipments, one of Indonesia’s key export commodities, which has seen significant price weakening throughout the year. The PMI report added that November saw a renewed uptick in production for the first time in three months, growing at the fastest pace since February. The higher production prompted manufacturers to increase inventories of finished goods to prepare for sustained demand. Firms hired more workers for the fourth consecutive month to meet rising capacity needs, though November’s hiring pace “softened slightly” from October. Read more at: https://www.thejakartapost.com/business/2025/12/01/local-demand-keeps-ri-factories-humming-as-exports-lose-steam.html.
