Indonesia: Manufacturing PMI hits nine-month high in May
June 3, 2019
Conditions in Indonesia’s manufacturing sector improved at a faster pace in May, according to the Purchasing Managers’ Index (PMI) released by IHS Markit and Nikkei, with the PMI increasing from 50.4 in April to 51.6 in May. As a result, the indicator remained above the 50-point threshold that separates expansion from contraction in the manufacturing sector.
May’s increase was underpinned by stronger output growth and renewed growth in new orders. Firms continued to take on more workers, while business sentiment warmed and firms stepped up purchasing activity in response to healthier demand conditions. On the price front, both input and output prices rose in May, marking an intensification of cost pressures. Bernard Aw, principal economist at IHS Markit, argued, “Firmer demand conditions saw backlogs rise for the first time in five years, suggesting that firms may continue to scale up production in coming months”.
Author: Oliver Reynolds, Economist