Yellow Light From Industry, Manufacturing PMI Slips To Level 50.3

Illustration (Photo: Doc. Ministry of Finance)

The Ministry of Finance (Kemenkeu) stated that the achievement of the Purchasing Managers Index (PMI) of Indonesian manufacturing which was at the level of 50.3 in May 2023 was still on an expansionary route (more than 50).

Head of the Fiscal Policy Agency (BKF) of the Ministry of Finance Febrio Kacaribu said that the score continued the positive trend of continuing to expand in 21 consecutive months.

"The expansion of manufacturing activities is mainly driven by increased production activities and input purchase activities," he said in a press statement quoted on Tuesday, June 6.

According to Febrio, the ASEAN area of manufacturing PMI data shows a variety of trends. It was stated that the PMIs of manufacturing Thailand and Myanmar were still in the expansion zone despite starting to show a slowdown trend.

"Meanwhile, the Malaysian and Vietnamese Manufacturing PMIs in May 2023 are still in the contraction zone, respectively at levels 47.8 and 45.3 in line with the global manufacturing PMI trend," he said.

Febrio explained that Indonesia's manufacturing sector expansion was mainly reflected in the level of employment in May, which was the best achievement in the last six months at the level of 50.6.

PMI Manufacturing, which is still expansive with a better level of employment, reflects Indonesia's resilience amid a continuing global economic slowdown," he said.

However, continued Febrio, business actors seem to be starting to anticipate the transmission of the impact of the global economic slowdown to the domestic. For this reason, the development of sustainable domestic demand growth needs to be maintained to support manufacturing sector activities.

"The trend of inflation that continues to improve needs to be maintained to support people's purchasing power," he said.

VOI noted that the Manufacturing PMI in May 2023 was 50.3 lower than April and March, which were 52.7 and 51.9, respectively.

"The government will continue to anticipate the risk of a global economic slowdown and maintain optimism in the business world," concluded the Head of the BKF Ministry of Finance Febrio Kacaribu.