Indonesia: Manufacturing PMI falls in May
June 2, 2017
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) dropped from April’s seven-month high of 51.2 to 50.6 in May. The PMI still sits above the 50-point threshold, which indicates an overall improvement in business conditions. However, a notable fall from the previous month signals lost steam in the manufacturing sector’s pace of expansion.
According to the release provided by Nikkei and IHS Markit, new orders rose but at a slower rate compared to April. Stronger competition and raw materials shortages were behind the slowing output growth. New export orders provided an exception, increasing at the fastest rate in eight months. Manufacturing firms shed jobs while average input costs rose further. However, manufacturers were able to transfer some of the higher cost burden onto clients by raising selling prices. Overall, May saw waning optimism regarding future performance.
Author: Nihad Ahmed, Economist