Jakarta. Indonesia’s manufacturing purchasing managers’ index (PMI) is beating other ASEAN countries such as close neighbor Malaysia, according to business analytics firm S&P Global.

As the name suggests, the index portrays a country’s manufacturing performance based on new orders, output, employment, suppliers’ delivery times, and stocks of purchases. Indonesia’s manufacturing PMI went up from 52.2 in December 2023 to 52.9 the following month. This marks the 29th straight month of the Indonesian manufacturing sector’s expansion, which is marked by a reading of over 50. 

Indonesia’s manufacturing PMI is higher than other ASEAN members whose PMI has been published so far. While the Philippines’ manufacturing sector expanded at a slower pace of 50.9 in January, it was still the second-best performing ASEAN country. Followed by Vietnam (50.3), Malaysia (49.0), and Thailand (46.7). The conflict-struck Myanmar saw its manufacturing PMI rise from 45.1 in December to 46.7 in January, thus showing that the country’s sector remained in contraction. 

As of writing, S&P Global did not publish the January readings for other members of the Southeast Asian bloc. Nonetheless, ASEAN’s manufacturing sector expanded at 50.3 points in January, up from 49.7 the previous month. This is the first time that ASEAN passed the neutral 50.0 threshold in five months.

According to S&P Global, January’s readings showed that Indonesia enjoyed its fastest production growth in two years, which they attributed to a faster rise in new orders. S&P Global also wrote that there were signs of easing inflationary pressures at the start of the year.

"That said, business optimism dimmed slightly within the manufacturing sector in January, with some firms still concerned about growth prospects. Nevertheless, manufacturers continued to acquire inputs at a solid pace and also made attempts to raise their workforce capacity, suggesting that we should continue to see output expand in the near term,” Jingyi Pan, economics associate director at S&P Global Market Intelligence, said.

"Improvements on the exports front will be watched in the coming months, to see if the tentative rise in external sales will gather pace and match the strong domestic demand, as this in turn could provide a further boost to the manufacturing sector," Pan added.

According to Chief Economic Affairs Minister Airlangga Hartarto, Indonesia’s expansive PMI, coupled with inflation that is under control, is expected to spur the country’s economic growth.

“How the manufacturing sector continues to expand is something that deserves some appreciation. The government will continue to work hard to create a conducive business climate so we can continue to keep up this positive performance,” Airlangga said in a separate ministerial press statement on Friday.