Manufacturing PMI Is Increasingly Expansive In June But Textile Industry Still Suffers

BALI - The results of the Indonesian Manufacturing Purchasing Managers Index (PMI) survey released by S&P Global in June 2023 touched an expansionary level, namely 52.5, an increase significantly compared to the previous month at the 50.3 level.

Minister of Industry (Menperin) Agus Gumiwang Kartasasmita said Indonesia's manufacturing remained in an expansionary phase for up to 22 consecutive months or almost two years. This means that the level of optimism from Indonesian industry players as a whole has also increased.

"Alhamdulillah, we must be grateful that our manufacturing industry activities continue to move," said Minister of Industry Agus in a written statement, Tuesday, July 4.

Indonesian Manufacturing PMI in June 2023 was able to surpass the ASEAN Manufacturing PMI (51.0), Malaysia (47.7), Myanmar (50.4), Philippines (50.9), Taiwan (44.8), Vietnam (46.2), Japan (49.8), China (50.5), South Korea (47.8), England (46.2), and France (45.5).

The Minister of Industry said that Indonesia's Manufacturing PMI increase in June was in line with the increase in the Industrial Trust Index (IKI) which reached 53.93 or an increase of 3.03 points compared to May 2023.

"This figure is also the highest since IKI was released in November 2022," he said.

Although the manufacturing conditions nationally show an expansive level, the government admits that the textile and textile product (TPT) industry is still experiencing contraction. This industry is unfortunate, including one of the three manufacturing sub-sectors that experienced contraction in the IKI survey in June 2023.

Agus said that the cause of the textile industry was still suffering because the domestic market was flooded with imported products, especially those that entered through the PLB (Registed Logistics Center). "The Ministry of Industry requested that strict supervision of goods leaving the PLB enter the domestic market, as well as for marketplaces which are also entry points for imported textile products," he said.

However, the Ministry of Industry also sees opportunities for the TPT industry with the new school school year. This is believed to encourage and revive the depressed TPT industry.

Through the policy of Increasing the Use of Domestic Products (P3DN), it is hoped that the fulfillment of public school clothes and employee clothing in the government can increase production activities in the TPT industry to meet these requests.

Based on the S&P Global report, the expansion experienced by the Indonesian manufacturing industry in June 2023 was supported by an increase in new demand. This resulted in an increase in production, which also had an impact on increasing the number of workers.

Jingyi Pan as Economics Associate Director of S&P Global PMI Market Intelligence said the growth momentum in all sectors of Indonesian manufacturing will accelerate again in June 2023.

"The rate of overall demand increase is classified as solid, although the lack of external demand continues to hamper total sales growth," he said.