Indonesia PMI May 2017


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.

FocusEconomics Consensus Forecast panelists see fixed investment rising 5.8% in 2017, which is down 0.3 percentage points from last month’s estimate. For 2018, the panel expects fixed investment to increase 6.3%.

Author:, Economist

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Indonesia PMI Chart

Indonesia PMI May 2017

Note: Nikkei Indonesia Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 indicate a contraction.
Source: Nikkei and IHS Markit.

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