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Investing.com -- Indonesia’s manufacturing sector showed a modest improvement in operating conditions at the start of the fourth quarter of 2025, with the headline S&P Global Indonesia Manufacturing PMI rising to 51.2 in October from 50.4 in September.
The improvement extended the current growth sequence to three months, driven primarily by an accelerated expansion in demand for Indonesian goods. New orders increased for the third consecutive month, with the rate of growth reaching the joint-strongest level since March.
Panel members reported improved domestic market activity encouraging local clients to place additional orders. However, the expansion was domestically driven, as manufacturers reported a second successive fall in new export business amid largely muted demand in international markets.
Employment levels increased for the third month in a row and at the steepest rate in five months, as positive sales movements encouraged firms to raise capacity.
Factory output remained unchanged from September, following a slight decline in the previous survey period. Some manufacturers reported using existing stocks to complete incoming orders, with post-production inventory holdings falling fractionally.
Price pressures intensified, with input price inflation reaching an eight-month high amid higher raw material prices. Despite this, firms raised their selling prices only marginally in efforts to remain competitive.
Purchasing activity among Indonesian goods producers increased for the third consecutive month, albeit modestly. Pre-production inventories also rose as some firms stored inputs in response to improving demand and production requirements.
"The improvement in the health of the Indonesian manufacturing sector strengthened at the start of the fourth quarter of 2025, boding well for the coming months," said Usamah Bhatti, Economist at S&P Global Market Intelligence.
Looking ahead, confidence regarding the 12-month outlook dipped from September and was below the series average, though still indicating robust optimism underpinned by expectations of stronger demand conditions and new product launches.
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