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Indonesia PMI October 2018

Indonesia: Manufacturing PMI dips again in October

Conditions in Indonesia’s manufacturing sector improved at a slower pace in October, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei, with the PMI decreasing from 50.7 to 50.5 in October. However, the reading was still above the 50-point threshold that seperates expansion from contraction in the manufacturing sector.

October’s decline was driven by the first fall in new orders since January, which in turn came partly on the back of lower exports. In contrast, output and employment continued to increase. Input price inflation reached a fresh multi-year high in October on currency weakness and higher raw material costs, with firms raising output prices as a result. Firms’ 12-month business expectations improved in October.

According to Aashna Dodhia, Economist at IHS Markit, “Company plans of pursuing enhanced marketing initiatives and product diversification were the key factors behind positive projections for output over the year ahead, according to anecdotal evidence.”

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