Based on the latest data from IHS Markit, the headline seasonally adjusted Nikkei Indonesia Manufacturing Purchasing Managers’ Index (PMI) fell modestly to a reading of 50.5 in October 2018 (from 50.7 in the preceding month). The reading represents a marginal improvement in the health of Indonesia’s manufacturing sector.
The headline PMI provides a snapshot of the manufacturing performance in Indonesia and derives its results from questions on output, new orders, employment, inventories and delivery times. A reading above 50.0 indicates expansion in the manufacturing sector, while a reading below 50.0 indicates contraction.
However, albeit improving, the pace of growth in the country’s manufacturing conditions slowed in October. Moreover, the pace was also below the average reading that was seen over the first nine months of 2018. Softer client demand, with declines seen in both total new orders and export sales, while inflationary pressures are rising driven by a weak rupiah, triggered slowing growth in Indonesia’s manufacturing sector.
On the other hand, higher output and employment boosted the headline PMI in October 2018, while manufacturing firms continued to raise purchasing activity and build input inventories. Meanwhile, firms remained generally positive about the longer-term business outlook.
Manufacturing PMI Indonesia:
This articles discusses:
• Conditions/developments in Indonesia's manufacturing industry in October 2018
• Why direct investment in Indonesia's manufacturing industry has contracted so far this year
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