Manufacturing PMI Down, Jokowi Asks Ministers To Find Out The Cause

President Joko Widodo chaired the inaugural plenary session with the ministers of the Advanced Indonesia Cabinet at the Garuda Palace, IKN (Photo: ANTARA)

JAKARTA - President Joko Widodo (Jokowi) asked all his staff to be aware of the decline in Indonesia's manufacturing purchasing manager index (PMI).

Indonesian manufacturing PMI in July 2024 was at the level of 49.3. This figure is lower than the position in June which was 50.7.

This was conveyed by Jokowi in front of the minister of the Indonesia Maju working cabinet in the inaugural plenary cabinet meeting at the Presidential Palace of the Capital City of the Archipelago (IKN), East Kalimantan.

"Regarding PMI, the purchasing manager index that we know after an expansionary period of 34 consecutive months, in July we entered the contraction level. This is so that we can be watched out for carefully," Jokowi said as quoted from the Presidential Secretariat's YouTube, Monday, August 12.

Still, Jokowi said, countries in Asia also experienced a decline in PMI whose index was below 50, namely Japan 49.2; Indonesia 49.3; China 49.8; and Malaysia 49.7.

"The most declining components are in the production sector, namely minus 2.6 then new orders or new orders minus 1.7 and employee minus 1.4," he explained.

Therefore, Jokowi asked his ministers to find out the main cause of the decline in manufacturing PMIs that have occurred over the past four months.

Jokwoi asked his staff to find out whether the cause of the decline in manufacturing PMI was due to weakening domestic demand, or because of the increasing burden of imports of raw materials due to rupiah fluctuations or attacks by imported products.

"I really want to find the main cause and it will be anticipated immediately because I see that the decline in PMI has occurred in the last four months," he said.

"It is true to see why domestic demand has weakened. It could be because the burden of importing raw materials is high due to fluctuations in the rupiah or also attacks on imported products that enter our country," he continued.

In addition, Jokowi asked to find out whether PMI's decline was also due to the reduced demand from export destination countries.

According to him, if that's the case, Indonesia will have a new market for new export destinations.

"So we have to be able to find non-traditional markets and look for the potential of our new export market," he said.