Indonesia PMI


Manufacturing PMI reflects ongoing deterioration in sector June

The manufacturing Purchasing Managers’ Index (PMI) inched up from 47.1 in May to 47.8 in June, according to a release provided by Nikkei. Despite the modest increase in June, the result continues to signal deteriorating conditions in the manufacturing sector. The index has been below the 50-threshold, which indicates contraction in the manufacturing sector, since September of last year.

June’s figure signaled the ninth straight contraction in both output and new orders. Challenging economic conditions, weak demand and deteriorating purchasing power dragged on production and new orders. New export business fell again in June amid sluggish global demand. Lower production and new work requirements led manufacturers to reduce their purchasing activity at a sharp pace. Employers trimmed their employment levels in June for the 11th consecutive month.

According to Markit, “The PMI averaged 47.2 for the second quarter of 2015, its lowest quarterly reading since data were first collected in early 2011.This indicates that GDP growth is likely to have eased further from Q1, when it posted its weakest annual expansion since 2009.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 5.3% in 2015, which is down 0.2 percentage points from the previous month’s estimate. For 2016, the panel expects manufacturing to increase 5.8%.

Author:, Economist

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Indonesia PMI Chart

Indonesia PMI June 2015

Note: HSBC 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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