Minister cautions of decline in national manufacturing PMI

Minister cautions of decline in national manufacturing PMI

Finance Minister Sri Mulyani Indrawati during the Press Conference: APBN Kita November 2022 accessed from Jakarta on Thursday, November 24, 2022. (ANTARA/Agatha Olivia Victoria/my)

This condition will be our challenge in 2023
Jakarta (ANTARA) - Finance Minister Sri Mulyani Indrawati warns of a decline in the national manufacturing Purchasing Managers' Index (PMI) that was at the rate of 53.7 in September 2022, plummeting to 51.8 in October 2022.

Over the past 14 months, the index has always been at an expansive level. However, the level has started to show a decline in the last month.

"We need to be cautious of this decline because it involves very crucial manufacturing activities," Minister Indrawati stated at the press conference on November 2022's state budget performance and facts (APBN Kita), accessed here on Thursday.

However, the manufacturing and mining production capacity continued to increase, close to the rate before the COVID-19 pandemic hit, which were at 73.5 for manufacturing and 73.2 for mining, she pointed out.

This rate of capacity means that the manufacturing sector is experiencing a recovery, as it continues to improve its activities until that production capacity is the same as the one prior to the pandemic.

Other production and investment indicators, such as growth in electricity consumption, are still very high in industrial and business activities, which increase 5.7 percent year-on-year (yoy) and 12.5 percent (yoy), respectively.

Nonetheless, the growth trend indicated an opposite direction as compared to the months before, she noted.

"This actually has the influence of global factors that must be watched out for. Hence, we really have to be optimistic but vigilant," she noted.

Thus, the minister will follow up on the conditions, whether the manufacturing index, electricity consumption growth, and manufacturing and mining production capacity, as indicators of production and investment, could withstand the global turmoil.

"This condition will be our challenge in 2023," she concluded.

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