Indonesia PMI June 2020


Indonesia: Manufacturing conditions deteriorate at softer pace in June

July 1, 2020

The manufacturing Purchasing Managers’ Index (PMI) released by IHS Markit rose from 28.6 in May to 39.1 in June amid an easing of Covid-19 restrictions. However, the reading was still entrenched below the 50-threshold signifying a worsening in operating conditions.

June’s reading was driven by softer falls in production and new orders. However, the declines were still sizeable, and fed into lower employment and purchasing activity. On the price front, input cost inflation rose to the highest in over a year, although the uptick in output prices was modest, likely as firms were faced with still-weak demand.

The manufacturing sector should continue to recover in H2 as lockdowns are lifted around the world, although manufacturing output is still seen declining over 2020 as a whole.

FocusEconomics Consensus Forecast panelists expect manufacturing output to decline 0.4% in 2020, which is down 1.3 percentage points from last month’s forecast. In 2021, manufacturing is seen growing 5.0%.


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Indonesia PMI Chart

Indonesia PMI June 20 20

Note: Indonesia Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month, and below 50 an overall decrease.
Source: IHS Markit.

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