Indonesia: Manufacturing PMI improves in July
The Manufacturing Purchasing Managers’ Index (PMI), produced by S&P Global, increased to 51.3 in July from 50.2 in the month prior. As a result, the PMI rose further above the 50-threshold that separates improving from deteriorating conditions in the manufacturing sector compared to the previous month.
July’s reading came on the back of an improvement in overall demand, which boosted new orders and output in turn. Moreover, staffing levels rose at a record-breaking rate. That said, new export orders weakened from the previous month. On the price front, despite higher prices for fuel and raw materials, input costs rose at a more moderate pace. Therefore, higher costs were passed on to customers. Lastly, optimism concerning the manufacturing output outlook over the coming 12 months improved.
Commenting on the release, Siân Jones, senior economist at S&P Global, said:
“Encouragingly for manufacturers, July saw a softening of price pressures. Cost burdens and selling prices both rose at the slowest rate for over a year, relieving some concerns held by firms. That said, upside risks to price rises remain, as fuel and material costs continue to drive inflation.”