The IHS Markit Indonesia Manufacturing PMI was down to a three-month low of 53.5 in December 2021 from 53.9 a month earlier. Still, this was the fourth straight month of increase in factory activity following the easing of COVID-19 curbs in prior months. There was a further slowdown in the growth of demand, with new orders expanding the least in four months. At the same time, employment was stagnant, while backlogs of work increased marginally. Encouragingly, output growth accelerated to third-fastest on record, foreign demand rebounded strongly, and buying levels picked up.
Meanwhile, supply chain pressure persisted as vendor performance deteriorated further. On the prices front, input cost inflation hit its highest in over eight years, due to higher costs across a range of raw materials and increased shipping fees; while output charges climbed more slowly. Lastly, sentiment strengthened, on hopes that economic conditions will improve as pandemic disruptions ease.
