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Indonesia PMI June 2020

Indonesia: Manufacturing conditions deteriorate at softer pace in June

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.

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