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RI manufacturing activity sees slight uptick amid underwhelming sales
Local firms remain cautious when considering employment numbers despite improvements in manufacturing activity.
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Domestic production: Boxes of battery cells are stored for shipment at the battery manufacturing plant at PT HLI Green Power, Indonesia's first electric vehicle battery cell manufacturer, in Karawang, West Java, on Aug. 28. (AFP/Yasuyoshi Chiba)
Indonesian manufacturing activity saw a slight improvement in November, but firms remain concerned regarding new orders.
The country’s purchasing managers' index (PMI) rose slightly to 49.6 in November from 49.2 in the previous month, but remains below the crucial 50 mark that separates growth from contraction, extending a similar trend over five consecutive months, according to report published by S&P Global on Monday.
The report noted that the increase in PMI last month was due to an expansion in production for the first time in five months with growth occurring amid reduction in new orders where demand for goods “remained underwhelming”.
Paul Smith, economics director at S&P Global Market explained the report showed an upturn in outputs following bolstered production in many firms to boost inventories and clear outstanding work ahead of an expected increase in performance next year.
However, the report indicated that Indonesian manufacturing faced quiet market activity, fueled by weak spending power among clients, as well as a decline in new export orders, which fell for the ninth consecutive month.
“But less positive was the continued underwhelming performance of sales, which fell for a fifth successive month during November. This led firms to remain cautious when considering employment numbers, choosing not to replace [those who left] their plants or, in some cases, invoke redundancies,” Paul said in a statement on Monday.
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