Minister of Industry Agus Gumiwang Kartasasmita is optimistic the manufacturing industry will grow positively, approaching 4 percent in 2021.

Previously, in quarter III-2020, the manufacturing industry contracted by 4.31 percent and in quarter II-2020 also contracted 6.19 percent.

'The manufacturing industry in 2021 is expected to swing into a positive point. The entire manufacturing sub-sector will return to vigor, assuming the pandemic is under control and economic activity will recover. We project that the growth of the manufacturing industry in 2021 will grow by almost 4 percent, " the minister said in Jakarta, Thursday (14/1).

One of the reasons for this optimism is the improvement in Indonesia's Manufacturing Purchasing Managers' Index (PMI) as it continues to be at an expansionary level. In December 2020, the Indonesian Manufacturing PMI was at the level of 51.3, an increase compared to the previous month's achievement at 50.6.

An index figure above 50 means expansion, while below 50 means contraction. The Indonesian Manufacturing PMI at the level of 51.3 is the highest achievement in Indonesia's history during HIS Markit's survey in industrialized countries.

"For two consecutive months, the Indonesian Manufacturing PMI has entered an expansionary phase. Of course, there are several reasons, one of which is the belief of industry players that from the existing data there is a reborn in domestic consumption, as well as a signal that a vaccine will be present. This has created high confidence from industry players to encourage the production process, "said Agus.

Also, Bank Indonesia noted that business activities in the manufacturing industry began to show signs of expansion. BI expects the industry's performance may continue improving in the first quarter of 2021.

BI has forecast the Manufacturing Purchasing Managers Index (PMI BI) for the fourth quarter of 2020 to reach 47.29 percent. This achievement is much higher than the two previous quarters at 45.64 and 44.91 percent, respectively.