The Indonesian government announced on Monday that the manufacturing sector displayed slightly increased confidence in the country’s industrial conditions in September, although businesses experienced a decline in new orders compared to the previous month.
The Industry Ministry’s monthly industrial confidence index recorded a reading of 52.48 in September. The index, which operates on a scale from 0 to 100, measures the manufacturing sector’s economic confidence by surveying businesses on various indicators, including the volume of new orders received.
An index reading above 50 indicates expansion in the manufacturing sector, while a reading below that threshold suggests contraction. The September figure shows minimal growth compared to the 52.40 index reported in August, according to Industry Ministry spokesman Febri Hendri Antoni Arief.
“The Indonesian manufacturing industry remains in an expansive state. However, compared to August’s figure, the industrial confidence index showed little change in September, with only a 0.08-point increase,” Febri stated during a press conference on Monday.
The decline in new orders was a notable aspect of the September report. Businesses reported fewer new orders, with the indicator falling from 54.66 points in August to 51.95 in September. Other components of the index, such as production and inventories, showed different trends. Respondents indicated increased production activity, with the average production indicator rising to 51.12 in September from 46.54 in August. The inventory indicator also showed growth, climbing slightly from 55.54 in August to 55.85 in September.
Among manufacturing sub-sectors, non-metallic minerals and electrical equipment recorded the highest industrial confidence levels in September. Conversely, the electronic goods and computer industries faced contraction. Febri attributed this decline to an influx of imported electronics, both through legal and illegal channels.
The survey also revealed little change in business sentiment regarding future industry conditions. Approximately 71.5 percent of respondents expressed optimism about the next six months, a slight decrease from the 71.6 percent recorded in August. Additionally, 77.4 percent of respondents reported either stable or growing business activity in the September survey.
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