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RI manufacturing activity sees slowest growth in six months
Indonesia's manufacturing sector experienced its slowest growth in six months after the country's May PMI figure fell to 50.3 points due to weaker domestic and global economic conditions.
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Lifesavers: Female workers produce waterproof personal protective equipment (PPE) on April 20, 2020 at a factory in Malang, East Java. The factory switched from producing garments to PPEs in response to rising demand during the COVID-19 pandemic. (jp/Aman Rochman)
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ndonesia's manufacturing activity shrank to its slowest growth in six months, following weaker domestic and global demand, according to S&P Global's purchasing managers' index (PMI).
The PMI, which surveys purchasing executives from more than 400 manufacturing companies to determine the state of business conditions, decreased by 2.4 points to 50.3 in May compared with the previous month’s score of 52.7.
The latest figure remains above the 50-level, which separates expansion from contraction, but May’s figure signified the slowest pace of expansion since November 2022.
“A key development in the latest survey was a renewed downturn in demand as weaker domestic and global economic conditions impacted new orders,” said S&P Global Market Intelligence economics associate director Jingyi Pan in a press statement on Monday.
S&P explains that production in the archipelago still increased on the back of existing orders and better supply conditions, but the growth softened as new orders are experiencing renewed contraction.
New orders also saw a deterioration and it plays a central role in the drop of the headline PMI reading. On top of that, foreign demand also waned as new orders from abroad fell for the twelfth month in a row due to weaker market conditions.
“It will be important to monitor how persistent the latest decline in demand will be as this will affect the near-term growth outlook,” said Pan.
