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Indonesia PMI September 2019

Indonesia: September’s manufacturing PMI hovers near August’s over two-year low

Conditions in Indonesia’s manufacturing sector worsened further in September, albeit at a slightly milder pace, with the PMI edging up to 49.1 from 49.0 in August according to the Purchasing Managers’ Index (PMI) released by IHS Markit. As a result, the index moved slightly closer to the 50-threshold that separates expansion from contraction in the manufacturing sector, but still sits close to a two-year low.

September’s reading came amid lower production, employment, new orders and exports, as both domestic and external demand remained weak. This comes as part of a wider deterioration in conditions across ASEAN’s manufacturing sector, although Indonesia’s manufacturing sector was one of the region’s worst performers. On the cost front, input and output price inflation remained muted.

Notwithstanding September’s muted reading, Bernard Aw, Principal Economist at IHS Markit, commented with some optimism about the future, noting that “while the short-term outlook looks gloomy, longer-term prospects remained more positive, with the majority of respondents expecting higher output over the next 12 months.”

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