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Indonesia PMI May 2020

Indonesia: Manufacturing conditions continue to deteriorate sharply in May

The manufacturing Purchasing Managers’ Index (PMI) released by IHS Markit ticked up from 27.5 in April to 28.6 in May. However, the reading was still entrenched below the 50-threshold signifying a worsening in operating conditions.

May’s reading was driven by further sharp falls in production and new orders, and a record fall in employment, in response to weak demand. On the price front, input cost inflation was solid, driven by raw material shortages and the weak rupiah, which fed through to higher output prices.

According to Bernard Aw, principal economist at IHS Markit:

“With the government mulling over re-opening the economy in phases from June, the PMI may rise in coming months, though it will take commensurately higher readings to recoup the severe losses seen in recent months.”

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