Indonesia's manufacturing activity recorded significant growth in December 2024, marking a return to expansion. According to Febrio Kacaribu, Head of the Fiscal Policy Agency at the Ministry of Finance, the Purchasing Managers' Index (PMI) rose to 51.2 in December from 49.6 in November, reaching its highest level since May 2024. This growth was driven by increased production and new demand from both domestic and international markets, especially during the Christmas and New Year celebrations. Meanwhile, other ASEAN manufacturing economies, such as Vietnam and Malaysia, remained in contraction, with PMI levels at 49.8 and 48.6, respectively. Febrio noted that this positive performance reflects Indonesia's resilient economy despite global and domestic challenges, reinforcing optimism for achieving over 5% economic growth in 2024.
Robust domestic demand for local products also supported the manufacturing sector's performance. The Retail Sales Index (RSI) rose by 1.7% year-on-year (yoy) in November 2024, compared to 1.5% in October, while Bank Indonesia's Consumer Confidence Index (CCI) surged to 125.9 in November from 121.1 in October. These indicators highlight strong purchasing power and growing public optimism about economic conditions, alongside manageable inflation levels. Additionally, PMI components revealed increased inventories of finished goods, signaling business optimism about future demand for Indonesian manufactured products. The manufacturing expansion has also boosted employment, reflecting broader economic resilience. Febrio emphasized that robust consumer and business confidence, along with thriving domestic consumption and industrial activity, will remain key drivers of Indonesia's economic growth as the country tackles challenges in 2025.
