Indonesia: Manufacturing PMI stuck in contraction territory in April
May 4, 2015
The manufacturing Purchasing Managers’ Index (PMI) increased from 46.4 in March to 46.7 in April, according to a release provided by HSBC. The index has been below the 50-threshold, which indicates contraction in the manufacturing sector, since September of last year. While the magnitude of April’s increase is negligible, it does mark a turnaround from March’s result that had marked the lowest level in the survey’s four-year history.
April’s figure reflected a seventh straight contraction in both output and new orders. Weak demand, unfavorable weather conditions and limited amounts of incoming new work dragged on production and new orders. New export business fell at the fastest rate in the survey’s history. Companies reported weak demand from African, Asian and American clients as well as tougher competition from Indian and Chinese manufacturers. Employers trimmed employment levels in April, although at a lesser pace than in previous months.
According to HSBC, “April’s PMI survey highlights the current fragility of the Indonesian manufacturing sector, with both the domestic and export markets sources of weakness.”
Author: Carl Kelly, Economist