Jakarta (Indonesia Window) – The Ministry of Industry said that Indonesia's manufacturing Purchasing Managers' Index (PMI) reached the highest record in history at 57.2 in October 2021, an increase compared 52.2 in September 2021.

"We believe that the expansive manufacturing sector could be maintained, even increased, because industrial companies have returned to boosting their productivity. This is also reinforced by increasingly conducive public health conditions," said Industry Minister Agus Gumiwang Kartasasmita in a statement received here on Monday (Nov. 1).

The minister said that the excellent performance of the manufacturing industry sector was the result of a synergy between the government and all stakeholders related to economic recovery efforts.

"This means that the policies taken in industrial development during this pandemic are on the right track, for example fiscal and non-fiscal incentives that increase demand and restore utilization," the minister said.

"The industry's confidence and adaptability during the pandemic could be seen from the revival of Indonesia's manufacturing PMI to an expansive level since November 2020 and continues to strengthen until October 2021," he noted.

The minister emphasized that in the midst of various global challenges, the performance of the Indonesian manufacturing industry shows a positive growth trend from year to year, with the contribution to GDP that always increases.

In addition, he continued, the contribution of exports has always been dominant in the national export structure.

"This at the same time disperses an opinion that deindustrialization was taking place in Indonesia," said Agus.

Indonesia's manufacturing PMI in October this year surpassed a number of world manufacturing countries, including India (55.9), Vietnam (52.1), Japan (53.2), Russia (51.6), China (50.6), and South Korea (50.2).

Meanwhile, Jingyi Pan, an economics associate director of IHS Markit said the PMI of the manufacturing industry in Indonesia achieved the fastest growth record, in line with improving conditions after further easing of the restrictions on community activities.

"The increase in demand and output also shows better confidence in the manufacturing sector, as seen in the Future Export Index, purchasing activity and company recruitment. These are all positive signs of progress in the manufacturing sector in Indonesia," he said.

The IHS Markit survey in October indicated that Indonesia’s employment rate rose and purchasing activity expanded at the sharpest pace on record, leading to an increase in input inventory levels.

Meanwhile, overall business sentiment improved in October, rising to above average levels.

Survey respondents generally expected that business conditions would continue to improve, in line with the weakening impacts of COVID-19 on the manufacturing sector.

Reporting by Indonesia Window