"We are very grateful and would like to thank all manufacturing industry players in the country. This good news is a signal or indicator that industry players in the country are increasingly optimistic about the current economic conditions," Minister Agus Gumiwang Kartasasmita said.
The PMI was up from 53.3 in December last year, he noted. An index above 50 indicates that the manufacturing industry is in an expansionary stage, he explained during a working meeting with Commission VII of the House of Representatives on Wednesday.
The minister said that Indonesia's manufacturing PMI in January 2022 exceeded ASEAN's average manufacturing PMI of 52.7, Malaysia 52.8, Philippines 50.0, South Korea 51.9, Russia 51.8, and China 49.1.
The government is committed to continuing to create a conducive business climate, even in the midst of pressure due to the third wave of COVID-19, he added.
"Various strategic policies have been implemented by the government to accelerate national economic recovery, including providing stimulus for industrial players so that they can produce and be competitive," Kartasasmita explained.
He said he believes that the manufacturing industry sector has continued to play a significant role in the national economy.
"This significant role can be seen from the macro performance of the manufacturing industry sector in several indicators, such as investment realization, export achievements, and employment," he pointed out.
The manufacturing industry has also continued to be the largest contributor to exports, with exports reaching US$177.10 billion in 2021, accounting for 76.49 percent of total national exports, he highlighted.
This figure surpassed manufacturing exports of US$131 billion recorded in 2020 and US$127.38 billion in 2019, he said.
Meanwhile, investment realization in the manufacturing sector in 2021 was recorded at Rp325.4 trillion, an increase of 19.24 percent compared to 2020, Kartasasmita informed.
Regarding employment, the sector managed to absorb 1.2 million workers in 2021, bringing the total workforce engaged in the sector back to 18.64 million, in line with the recovery in the industry from the impact of the pandemic, the minister said.
Related news: Maintain economic recovery momentum achieved amid pandemic: Pandjaitan
Based on IHS Markit data, Indonesia's manufacturing sector has continued to expand at a solid rate in early 2022, he said. Demand in the sector has generally strengthened, partly due to a pickup in foreign sales supporting a sharper rise in manufacturing output, he explained. This has, in turn, prompted an increase in purchasing activity and employment, he added.
In the meantime, responding to the results of the manufacturing PMI survey in January 2022, Jingyi Pan, the economics associate director at IHS Markit, had said that operations in Indonesia's manufacturing sector improved in early 2022.
Client demand expanded more sharply, supported by reports of new demand growth from overseas, he informed. Meanwhile, employment and purchasing activities also recorded an increase, he noted. This also illustrates that economic conditions are improving, he added.
"Delivery time from the supplier is much better. It is also a positive sign. This improving condition needs to be monitored continuously as pressure on prices continues to increase sharply due to supply problems," he said.
The overall sentiment in Indonesia's manufacturing sector remained positive in January, with companies generally optimistic that the situation will continue to improve, allowing the economy to continue to grow, he added.
Related news: PMI improvement indicates rise in manufacturing sector: ministry
Translator: Katriana
Editor: Rahmad Nasution
Copyright © ANTARA 2022
