Indonesia PMI August 2016

Indonesia

Indonesia: Manufacturing PMI rebounds into expansionary territory in August

September 1, 2016

The manufacturing Purchasing Managers’ Index (PMI) rose from 48.4 in July to 50.4 in August, according to a release provided by Nikkei and IHS Markit. July’s result had marked a seven-month low. The index is now above the 50-threshold, which indicates an expansion in the manufacturing sector.

August’s increase came on the back of a rise in new business, which led firms to increase output and buying levels. However, job losses were still recorded and employment fell at the fastest rate seen this year. Meanwhile, inflationary pressures rose amid higher prices for metals and textiles. IHS Markit analysts commented that, “the return to growth of Indonesia’s manufacturing sector in August is a positive sign, especially as July’s decline raised concerns regarding the start of a new downturn. Survey data indicate that firms are undoubtedly cautious about the short-term outlook for new work and production, as highlighted by another reduction in payroll numbers.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 4.6% in 2016, which is up 0.2 percentage points from the previous month’s estimate. For 2017, the panel expects manufacturing to increase 5.0%.


Author: Angela Bouzanis, Senior Economist

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Indonesia PMI August 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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