The latest Prompt Manufacturing Index-Bank Indonesia (PMI-BI) reading in the second quarter (Q2) of 2023 indicates increasing manufacturing industry performance, remaining in expansionary territory, as reflected by a higher PMI-BI of 52.39% compared to 50.75% in the previous period. Increases were recorded across all PMI-BI components, particularly production volume, order volume, and inventory, which maintained expansionary phases with index readings above 50. Most manufacturing subsectors recorded gains, led by the Leather, Leather Products, and Footwear subsector, followed by the Machinery and Equipment subsector, Non-Metallic Mineral Products subsector as well as the Chemicals, Pharmaceuticals and Traditional Medicaments subsector. The PMI-BI trend is also consistent with the latest Manufacturing Industry findings presented in the Business Survey published by Bank Indonesia, where the corresponding Weighted Net Balance (WNB) increased to 2.21%.
Survey respondents forecast Manufacturing Industry performance to continue improving in the third quarter of 2023, with the PMI-BI increasing to 53.53% from 52.39% in the previous period. Respondents predict nearly all PMI-BI components to increase and occupy expansionary territory, particularly production volume, followed by supplier delivery times, and inventory. In addition, respondents expect all manufacturing subsectors to record an expansionary phase, led by the Machinery and Equipment subsector, followed by the Tobacco Processing subsector, and Basic Metals subsector.