The Manufacturing Industry Sector Performance Could Increase by 53.3%

Indonesia's Processing/manufacturing Industry

Bank Indonesia has just released its forecast data regarding the performance of the manufacturing industry sector. This sector is expected to increase to 53.3 in the first quarter of 2023.

Therefore, this figure shows an increase of 50.06 percent compared to the previous quarter.

Based on the results of Bank Indonesia’s Prompt Manufacturing Index survey or PMI-BI, all components recorded an increase with the highest increases in production volume, total order volume, and finished goods inventory volume.

“All Manufacturing Industry sub-sectors are predicted to be in an expansion phase with the highest indexes in the Textiles, Leather Goods, and Footwear sub-sectors,” said Executive Director of the Communications Department Erwin Haryono. quoted from Bank Indonesia’s official website, Sunday, January 15, 2023.

Other sub-sectors, such as the Wood Goods and Other Forest Products sub-sector, Fertilizers, Chemicals, and Rubber Products, as well as Iron and Steel Base Metals, said Erwin, also recorded an increase.

Bank Indonesia also noted that the performance of the Processing Industry in the fourth quarter of 2022 remained strong and was still in the expansion phase. This is reflected in the PMI-BI in the fourth quarter of 2022 which was recorded at 50.06 or is in an expansion phase with an index above 50 percent. Even though said Erwin, this achievement was lower than 53.71 percent in the third quarter of 2022.

Erwin said the expansion occurred in the majority of the components that make up the PMI-BI, especially the total order volume, finished goods inventory volume, and production volume.

“Based on the sub-sector, expansion occurred in the sub-sectors of cement and non-metallic mineral goods, textiles, leather goods, and footwear, transportation equipment, machinery and equipment, paper and printed goods, as well as food, beverages, and tobacco,” he said.

According to Erwin, the development of the PMI-BI is in line with developments in the Manufacturing Industry sector as shown by the results of the Bank Indonesia Business Activity Survey (SKDU), which is still growing, although slowing down, with a Weighted Net Balance (WNB) of 1.04 percent.

In addition, the Fourth Quarter 2022 Business Activity Survey conducted by Bank Indonesia indicates that the performance of business activities will also remain strong and is predicted to increase in the first quarter of 2023.

“This is reflected in the value of the Weighted Net Balance (WNB) of 10.27 percent, although it is lower than the SBT in the third quarter of 2022 of 13.89 percent,” said Bank Indonesia (BI) Communications Department Executive Director Erwin Haryono in an official statement at Jakarta on Friday, 13 January 2023.

The WNB value was positive in all sectors, except for the agriculture, plantation, animal husbandry, forestry, and fisheries sectors which declined, especially the food crops sub-sector as the planting season entered.

The continued strength of business activity in the fourth quarter of 2022 was supported by the higher growth of the tertiary sector, especially the services sector and the transportation and communication sector in line with increased demand during religious and national holidays, as well as Christmas and New Year holidays.