Indonesia: Manufacturing PMI holds at record high
August 1, 2014
The manufacturing Purchasing Managers’ Index (PMI) held at June’s 52.7 points in July, according to a release provided by HSBC. This is the highest result that has been recorded since the series began in April 2011. The index has been above the 50-threshold, which indicates expansion in the manufacturing sector, for the past 11 months.
July’s figure reflects another strong month for the new orders category, which extended its growth streak to 10 months. Strong overall new orders drove companies to scale up production at the highest rate on record, even though new export orders fell for a second straight month on weakening external demand. HSBC indicated that the simultaneous pick-up in domestic activity and weaker demand from abroad may exert further pressure on Indonesia’s trade and current account deficits. Meanwhile, the employment category rose for a second consecutive month, and although the pace of job creation was modest, it was the largest rise since July of last year.
Author: Carl Kelly, Economist