Indonesia: Manufacturing PMI falls to over two-year low in August
September 2, 2019
Conditions in Indonesia’s manufacturing sector worsened at a faster pace in August, according to the Purchasing Managers’ Index (PMI) released by IHS Markit, with the PMI decreasing to 49.0 from 49.6 in July. As a result, the index moved further below the 50-threshold that separates expansion from contraction in the manufacturing sector.
August’s drop came amid lower production, employment, new orders and exports, and was part of a wider deterioration in conditions across ASEAN’s manufacturing sector, against a backdrop of escalating global trade tensions. On the price front, muted demand fed through to soft input and output price inflation.
Regarding what the figures mean for the broader economy, Bernard Aw, Principal Economist at IHS Markit, commented: "Historical comparisons showed the latest PMI reading is consistent with GDP expanding at an annual rate of just below 5%."
Author: Oliver Reynolds, Economist