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Stubbornly low demand squeezes Indonesian manufacturers harder
Indonesia’s purchasing managers’ index (PMI) contracted for two-month straight to 50.3 points in November, the slowest in five months, and just slightly above the expansion threshold of 50.
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Business as usual: The COVID-19 pandemic has not stopped the production of electronic manufacturer PT Selaras Citra Nusantara Perkasa in Cileungsi in the West Java regency of Bogor. (JP/Wendra Ajistyatama)
P
ersisting sluggish global and domestic demand means Indonesia’s manufacturing sector faced worsening downward pressure in November, while inflationary pressure began to ease as consumption continued to weaken.
Citing the latest report from financial research firm IHS Markit, a subsidiary of S&P Global, Indonesia’s purchasing managers’ index (PMI) contracted two-month straight to 50.3 points in November, the slowest in five months, and just slightly above the expansion threshold of 50.
Down 1.5 points from October, the latest figure is just 0.10 points higher than the lowest point this year in June, whereas in September, Indonesia’s PMI was at an eight-month high of 53.7 points.
The PMI is a survey of purchasing executives from around 400 different firms on whether business conditions have expanded, remained the same or contracted.
“November’s PMI data revealed growth slowing across the Indonesian manufacturing sector midway through the fourth quarter. A slower improvement in overall demand conditions, amid a notable fall in foreign sales, had been one of the main culprits underpinning the loss of growth momentum,” S&P Global Market Intelligence director Jingyi Pan said on Thursday.
The market intelligence firm assessed that demand for Indonesian manufactured products had skidded due to economic conditions and supply-side issues, in particular foreign sales that fell “at the quickest rate” in the last 15 months.
