Indonesia: Manufacturing PMI improves in January but still signals contraction
February 1, 2016
The manufacturing Purchasing Managers’ Index (PMI) edged up from 47.8 in December to 48.9 in January, according to a release provided by Nikkei, thus marking the highest level in over a year The index has been below the 50-threshold, which indicates contraction in the manufacturing sector, since October of 2014.
January’s improvement came on the back of a stabilization in employee numbers after 17 consecutive months of reported job losses. In addition, the drop in production moderated and was the smallest in one year. On a negative note, the fall in new work continued and was broad-based. Regarding prices, price pressures continued to build in January, although at a weaker rate.
According to Nikkei, “Indonesian manufacturers reported a continued deterioration in operating conditions at the start of the new year, although the rate of worsening eased to the slowest in 15 months. Panellists cited sluggish market conditions in the sector during January, as levels of output and new projects continued to contract. Manufacturers remained cautious about their inventory holdings, lowering their volume of input purchases.”
Author: Carl Kelly, Economist