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Indonesia PMI March 2020

Indonesia: Record deterioration in manufacturing conditions in March

The manufacturing Purchasing Managers’ Index (PMI) released by IHS Markit decreased from 51.9 in February to 45.3 in March. As a result, the index moved below the 50-threshold, signifying worsening operating conditions.

March’s fall came on the back of record falls in output and new orders. Moreover, exports collapsed and firms cut staff numbers. Covid-19 and flooding disrupted supply chains, while business sentiment tumbled to the second weakest in the survey history. On the price front, input price inflation was modest and driven chiefly by the weaker rupiah and shortages, while output prices declined due to weak demand.

Bernard Aw, principal economist at IHS Markit, commented:

“The survey underlines how the global pandemic has impacted the Indonesian economy so far, but the increasing likelihood of stricter measures mean the downturn could worsen in the second quarter.”

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