The world is in the recession shadow. Some countries even experienced an inflation spike. Otherwise, Bank Indonesia reported that business and industry activities grew in the second quarter of 2022. The growth will be maintained until the next quarter.
On Thursday (14/7/2022), BI recorded a Weighted Net Balance (WNB) of 14.13%. An increase compared to the previous quarter which was 8.71%.
“The improvement in business performance is indicated especially in the Manufacturing Industry Sector; Trade, Hotel, and Restaurant; and Transportation and Communication, in line with the easing of mobility restrictions in various regions, the celebration of National Religious Holidays (HBKN) which encourages demand, as well as the availability of production facilities,” call the official statement of BI.
In line with the development of business activities, the BI report continued, production capacity used in the second quarter of 2022 reached 73.22%. An increase from 73.08% in the previous quarter.
The use of labor is also indicated to be improving and is out of the contraction phase. The financial condition of the business world is also indicated to improve compared to the previous period, particularly in terms of liquidity and profitability with easier access to financing.
In the third quarter of 2022, the BI report added, respondents predict that business activities will remain strong with a WNB of 13.75%.
The continued strength of these business activities was driven by the performance of several sectors such as the Mining and Quarrying Sector, and the Manufacturing Industry in line with the availability of production facilities and the Construction Sector according to historical patterns and increasing domestic demand.
“Meanwhile, a slowdown occurred in the Agriculture, Plantation, Livestock, Forestry and Fisheries Sector, particularly the Foodstuff Crops subsector (including horticulture) in line with the historical pattern of the growing season,” concluded the BI report.
Even the expansion in the second quarter of 2022 was higher than the previous quarter.
The Prompt Manufacturing Index-BI (PMI-BI) in the second quarter of 2022 was at 53.61%. An increase compared to the previous quarter which was 51.77%.
The PMI-BI, like the PMI version of S&P Global/IHS Markit, uses 50 as a starting point. If it is still above 50, it means that it is in the expansion stage.
Furthermore, in the third quarter of 2022, BI continued, and the improvement in the performance of the national manufacturing industry continued. PMI-BI in the third quarter of 2022 is estimated at 54.02%.
“The increase in PMI-BI was driven by all of its constituent components, especially production volume, the total volume of orders, as well as the number of employees who increased and were in the expansion phase. The majority of sub-sectors are expected to increase, with the highest index being in the Cement & Non-Metal Minerals sub-sector (54.71). %), Transportation Equipment, Machinery & Equipment (54.06%), and Iron & Steel Base Metals (53.60%),” concluded the BI report.
