Indonesia PMI May 2016


Manufacturing PMI loses some ground in May

The manufacturing Purchasing Managers’ Index (PMI) fell slightly from 50.9 in April to 50.6 in May, according to a release provided by Nikkei and Markit. The recent upswing in business sentiment seems to have stalled somewhat as May’s reading is slightly below that of April, which was at its highest point since July 2014. Despite having ticked down, the index still lies above the 50-threshold, which indicates an expansion in the manufacturing sector.

May’s drop came on the back of stagnating production and weaker new orders. Input costs rose due to higher inflation. Employment, however, was a bright spot in the survey and rose in May. Markit commented that, “the outlook, however, appears encouraging as businesses continued to take on additional workers and scaled up their buying activity to the greatest extent since July 2014, suggesting that a pick-up in demand is expected.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 4.7% in 2016, which is down 0.2 percentage points from the previous month’s estimate. For 2017, the panel expects manufacturing to increase 5.1%.

Author:, Economist

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Indonesia PMI Chart

Indonesia PMI May 2016

Note: Nikkei Indonesia Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 indicate a contraction.
Source: Nikkei and Markit.

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