Indonesia: Manufacturing PMI weakens in May
The S&P Global Manufacturing Purchasing Managers’ Index (PMI) came in at 50.8 in May, down from April’s 51.9 and marking the lowest figure in nine months. As a result, the index moved further closer to the 50.0 no-change threshold, signaling a slower improvement in business conditions compared to the previous month.
May’s result was mainly driven by a contraction in manufacturing production amid marked supply constraints. Moreover, growth in new orders and employment softened from the previous month. Meanwhile, input price inflation rose a quicker clip in May due to higher prices for raw materials. As such, businesses opted to raise output charges.
Lastly, sentiment regarding the coming months remained upbeat, although easing from April’s result.
Commenting on the release, Jingyi Pan, economics associate director at S&P Global, stated:
“The lengthening of suppliers’ delivery times, coupled with persistent and rapid increases in prices, highlighted the supply constraints affecting Indonesia’s manufacturing sector performance in May. The good news is that demand continued to rise, but it will be worth watching how much further manufacturing output may be affected going forward.”