The latest Prompt Manufacturing Index-Bank Indonesia (PMI-BI) reading in the fourth quarter of 2023 indicates solid manufacturing industry performance, remaining in an expansionary phase (index >50%), as reflected by a PMI-BI of 51.20%, despite retreating from 52.93% in the previous period.
By component, inventory increased, while production volume and order volume remained in expansionary territory. Furthermore, most manufacturing subsectors remained in an expansionary phase, led by the transportation equipment industry, followed by the machinery and equipment industry as well as the leather, leather products, and footwear industry.
The PMI-BI trend is also consistent with the latest expansionary manufacturing industry findings presented in the Business Survey published by Bank Indonesia, where the corresponding Weighted Net Balance (WNB) was recorded at 1.0%.
In the first quarter of 2024, survey respondents forecast manufacturing industry performance to improve, with the PMI-BI increasing to 53.39%. Respondents predict all PMI-BI components in an expansionary phase, led by production volume, followed by order volume and inventory.
Furthermore, respondents expect most manufacturing subsectors to occupy expansionary territory, with the highest index reading anticipated for the leather, leather products, and footwear industry, followed by wood, products of wood and cork and woven products from bamboo, rattan and similar materials as well as the tobacco processing industry.
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