PMI Manufacturing Again, Sri Mulyani's Subordinates: The Peak Of Pressure Is Over

Illustration (Photo: Doc. Antara)

JAKARTA - Head of the Fiscal Policy Agency of the Ministry of Finance Febrio Kacaribu revealed that the increase in the Purchasing Managers' Index (PMI) for the manufacturing sector to 43.7 in August 2021 compared to July 2021 which was 40.1 is evidence of growth in production and demand, although still at a moderate level. contraction.

“Although the figures have improved compared to July's position, new output and demand still contracted in August. The bottleneck in production and demand was caused by the escalation of COVID-19 cases, although the pressure eased slightly as the peak in July cases passed. Demand for new exports is also still recorded to decline, although in a slower range," he said in a press statement, Thursday, September 2.

According to Febrio, the company is still considered to be wary of the second wave of the pandemic, so there is still a reduction in the workforce. The WFH policy and absence from work due to COVID-19 led to a decrease in company capacity.

"This is reflected in the increase in the accumulation of work accumulation," he said.

In terms of purchasing and stock, the company also reduced its purchasing activity, although at a slower pace than in July. Apart from these constraints, the declining demand has also led to an increase in the stock of finished goods in the manufacturing sector.

Meanwhile, in terms of prices, he continued, COVID-19 continues to cause an increase in input and output costs. The increase in raw material prices made the acceleration of input price inflation the fastest since January 2014.

"The company is still passing on some of the costs to clients so that output costs are also recorded to be strong," he said.

Overall, sentiment on Indonesian manufacturing companies has weakened since July following the implementation of the Java-Bali PPKM as an effort to control the pandemic. However, the level of business confidence regarding production forecasts for the next year is still above the survey average.

"The government will continue to accelerate vaccination and provide stimulus for the business world through the National Economic Recovery (PEN) program so that the pandemic is more under control and business confidence can increase again. Community cooperation must also be continuously encouraged to maintain the momentum of the ongoing recovery so as to further encourage the recovery of the manufacturing sector which is strategic for the economy,” explained Febrio.

As for the inflation rate, in the August period, it was recorded at 1.59 percent on an annual basis (year-on-year/yoy), an increase from July's figure of 1.52 percent yoy. On a month-to-month basis, inflation was recorded at 0.03 percent month-to-month, resulting in a cumulative 0.84 percent year-to-date.

"Looking at the development of inflation until August, inflation is estimated to be possible to strengthen again due to the relaxation of the PPKM and the daily COVID-19 cases which are in a controlled trend," closed Febrio, Sri Mulyani's subordinate.