Pollyanna De Lima, economist for the HSBC Markit survey, stated that Indonesia’s April contraction signals the ongoing fragility of the Indonesian manufacturing sector as both domestic and export markets form sources of weakness.

Indonesia Manufacturing PMI:

Costs of imported raw materials rose due to the weak rupiah and therefore Indonesian businesses could not price their output competitively on the international market. This resulted in a sharp fall of new business from abroad (output declined at the second-quickest pace since the start of the index). Moreover, unconducive weather conditions hampered domestic manufacturing activity. Due to reduced activity Indonesian employers trimmed employment for the ninth consecutive month.

Conditions are expected to remain tough in the foreseeable future.