Employment growth in Indonesia’s manufacturing industry hit a record high in June according to Nikkei Indonesia Manufacturing purchasing managers’ index survey. Companies scaled up to match higher order books caused by the shifting of global Manufacturing landscape beyond BRIC to other emerging countries, including Indonesia and the rest of ASEAN members reports the latest DHL research.
The PMI — a composite of manufacturing output, new orders, exports and employment measures — increased to 51.9 in June, compared to 50.6 a month earlier.
The rate of increase in new orders and output both reached a 23 month high. Output growth resumed in June after suffering from stagnation a month earlier as the improving domestic demand matched the slower decrease of new orders from abroad.
Both pre-and post-production inventories also increased in the period, while the manufacturing employment rose to the fourth successive months in June — the sharpest pace on record since 2011. The survey-record rise suggests that businesses expect the upturn in incoming new work to be sustained as we move to the second half of the year.
“A stronger increase in costs combined with better demand conditions is likely to lead goods producers to further increase their own charges in the near term,” Pollyanna De Lima, an economist at Markit, said in a note.
The country’s global share of manufacturing has remained at around 0.6 percent over the last 15 years. “Now is a critical moment for Indonesia to implement further reforms that will enhance the competitiveness of its manufacturing and services sectors, especially tourism.” said Ndiame Diop, the World Bank’s Lead Economist for Indonesia.
A version of this appeared in Jakarta Globe on July 1. Read the full article here.