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Indonesia PMI October 2019

Indonesia: PMI drops to near four-year low in October

Indonesia’s manufacturing sector weakened in October according to the Purchasing Managers’ Index (PMI) released by IHS Markit, with the reading dropping to a near four-year low of 47.7, down from 49.1 in September. As a result, the index moved further below the 50-threshold that signifies deteriorating operating conditions in the manufacturing sector.

October’s reading came amid lower production and new orders, both of which fell at accelerated rates from last month. Employment also fell, while higher accumulated stocks indicated lower overall demand for Indonesian manufactured goods. On the cost front, input and output prices declined in October.

Regarding October’s gloomy reading, Bernard Aw, Principal Economist at IHS Markit, commented with some pessimism about the future, noting:

“[Various] indicators pointed to challenges in the coming months: firms cut back on purchasing activity, reduced staff levels and lowered selling prices due to the deteriorating business environment. Business confidence also dipped to the lowest for six months.”

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