Although at a slower pace, Indonesia's manufacturing activity continued to contract in January 2016. According to the latest Nikkei survey, the Indonesia Manufacturing Purchasing Managers' Index (PMI) rose to 48.9 in the first month of 2016 from a reading of 47.8 in the preceding month (a reading below 50 signals contraction in the manufacturing sector). It was the 16th consecutive month of contraction in Indonesia's manufacturing sector as domestic and global economic growth remains subdued.
Markit economist Samuel Agass said the January figure was the highest in 15 months - although still showing contraction. Moreover, it is positive that employee numbers stabilized after a long period of job cuts in Indonesia's manufacturing sector. However, Agass added that overall demand in the market remains sluggish and therefore the outlook for Indonesia's manufacturing sector in the months ahead remains challenging.
Indonesia - Purchasing Managers' Index (PMI):