Indonesia: Manufacturing PMI falls in June
July 1, 2019
Conditions in Indonesia’s manufacturing sector improved at a slower pace in June, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei, with the PMI decreasing from 51.6 in May to 50.6 in June. However, the indicator remained above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
June’s drop was underpinned by weaker growth in output, new orders and employment. On the price front, both input and output price inflation eased, while firms remained optimistic about future production levels.
Despite softer demand conditions, Bernard Aw, Principal Economist at IHS Markit, commented: “other PMI indicators implied that the slowdown could be temporary, with a further rise in backlogs of work while business expectations regarding the year-ahead outlook for output remained buoyant. The latest PMI data are consistent with annual GDP growth of just over 5%.”
Author: Oliver Reynolds, Economist