Indonesia: Manufacturing PMI declines in December to record low
January 2, 2015
The manufacturing Purchasing Managers’ Index (PMI) decreased from 48.0 in November to 47.6 in December, according to a release provided by HSBC. The result marked the lowest level on record. Moreover, the index is now further below the 50-threshold, which indicates contraction in the manufacturing sector.
November’s figure reflected strong contractions in output and new orders. Output fell at the fastest rate since January 2012, amid reports of falling demand and higher fuel prices. New orders contracted at the sharpest rate since April 2011, with softening external demand dragging down new export business in particular. Moreover, the decrease in production and demand led to a fifth consecutive fall in employment. The recent fuel price hike also caused input prices to increase the most in 10 months.
According to HSBC, “the PMI weakened to yet another record low in December, as weak external demand placed a particularly large drag on manufacturing sector conditions.”
Author: Carl Kelly, Economist