Manufacturing Industry Indonesia Contracts for 15th Straight Month
The latest survey from Nikkei showed that Indonesia's manufacturing sector contracted for the 15th straight month. In the last month of 2015 factory activity in Indonesia showed a reading of 47.8, improving from a reading of 46.9 in November but remaining stubbornly below the 50.0 level that separates contraction from expansion. Since October 2014 Indonesia's manufacturing purchasing managers' index (PMI) has been in contraction.
In December 2015 Indonesia's manufacturing production declined as global demand remained weak, while the fragile rupiah caused higher production costs due to costly imports of raw materials. There was a moderate contraction in order book volumes. Meanwhile, employment decreased at as faster rate.
Markit Economist Pollyanna De Lima said that the eight recently unveiled economic stimulus packages of the Indonesian government should manage to boost Indonesia's manufacturing industry as these packages include various incentives for local industries, provided that these packages are implemented successfully.
Indonesia - Purchasing Managers' Index (PMI):
Earlier today it was announced that China's Caixin/Markit PMI contracted for the 10th consecutive month in December 2015 at 48.2, below market expectations, hence putting pressure on Asian assets.