Regulatory Hurdles Impede Indonesia Manufacturing Industry’s Expansion

The Ministry of Industry attributes the slowdown in Indonesian Manufacturing PMI in May 2024 to regulations perceived as not conducive to the business climate for domestic industry players. Minister of Trade Regulation No. 8/2024 is cited as one such regulation impacting the industry negatively.

Lili Sunardi & Afiffah Rahmah Nurdifa

4 Jun 2024 - 14.13
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Regulatory Hurdles Impede Indonesia Manufacturing Industry’s Expansion

Workers finish making automotive components at the PT Dharma Polimetal Tbk. factory. (DRMA) in Cikarang, Bekasi, West Java, Tuesday (20/9/2022). Bisnis-Suselo Jati

Bisnis, JAKARTA — Regulatory hurdles that fail to bolster the domestic business environment are responsible for the decline in the Indonesia Manufacturing Purchasing Managers' Index (PMI) in May this year, marking its lowest point in the past five months.

Despite the decline, the Indonesia Manufacturing PMI for May 2024 remained in expansion territory, albeit weakened to 52.1 from the previous month's 52.9. This continued expansion extends the streak of Indonesia's Manufacturing PMI growth to 33 consecutive months.

According to the latest S&P Global report, the dip in Indonesia's manufacturing PMI level in May 2024 stemmed from a combination of factors, namely a decline in industry confidence to its lowest point, rising input costs, and market pressures restricting pricing flexibility, thus burdening consumers.

The Ministry of Industry has evaluated that the deceleration in Indonesia's Manufacturing PMI last month was impacted by regulatory constraints that failed to foster a conducive business environment for domestic industry players, with Minister of Trade Regulation No. 8/2024 being one of them.

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© Copyright 2024, Hak Cipta Dilindungi Undang - Undang.