Indonesia PMI October 2016


Indonesia: Manufacturing PMI falls into contractionary territory in October

November 2, 2016

Indonesia’s manufacturing industry started off Q4 on a weak footing as the manufacturing Purchasing Managers’ Index (PMI) fell from 50.9 in September to 48.7 in October, according to a release provided by Nikkei and IHS Markit. The index now lies below the 50-threshold, which indicates a contraction in the manufacturing sector.

October’s fall came on the back of falling outputs, buying levels and employment. Incoming orders declined for the first time since July amid subdued demand and poor weather conditions. However, IHS Markit analysts commented that the PMI could rebound going forward, stating that, “In light of Bank Indonesia’s decision to ease monetary policy for a second straight month, manufacturing growth may be resumed as we approach the year end.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 5.0% in 2016, which is up 0.1 percentage points from the previous month’s estimate. For 2017, the panel expects manufacturing to increase 5.1%, which is also up 0.1 percentage points from last month’s projection.

Author: Angela Bouzanis, Senior Economist

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Indonesia PMI Chart

Indonesia PMI October 2016

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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