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Manufacturing PMI drops to lowest level this year
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Workers produce noodles on Jan. 14, 2023, at a factory in Surabaya, East Java. (AFP/Juni Kriswanto)
F
actory activity in Indonesia has slowed to the lowest level this year but remains in positive territory, according to the latest monthly report published by S&P Global on Monday.
The headline purchasing manager’s index (PMI) fell to a reading of 52.1 in May from 52.9 in April, pointing to the slowest rate of expansion since November last year.
Index values above 50 signify an expansion in activity, while readings below that threshold point to a decline.
Notwithstanding, the slowdown from the preceding month, the latest PMI figure marks a 33rd month above the threshold and hence a 33rd month pointing to an improvement in operating conditions.
“May’s survey data showed another month of solid manufacturing sector performance, underpinned by concurrent gains in output and new orders,” Paul Smith, economics director at S&P Global Market Intelligence, said in a press release published on Monday to accompany the latest survey results.
The headline index is based on the responses of purchasing managers to a questionnaire sent to around 400 manufacturers across the country and compiled from five subindexes to capture producers’ views on new orders, output, employment, suppliers’ delivery times and stocks of purchases.
Much like the latest gross domestic product (GDP) data report, the PMI survey shows that economic activity in Indonesia currently relies strongly on the local market as demand from other countries remains lackluster.
