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PMI plunges deep into contraction territory amid US tariffs
Indonesia’s manufacturing Purchasing Managers’ Index (PMI), the key gauge of factory activity in the country, has touched its lowest point since the coronavirus pandemic.
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Mass rollout: Workers assemble electric motorcycles on Sept. 21, 2023, at Plant II of manufacturer PT Terang Dunia Internusa in Citeureup, Bogor, West Java. (Antara/Arif Firmansyah)
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ndonesia’s manufacturing Purchasing Managers’ Index (PMI), the key gauge of factory activity in the country, has touched its lowest point since the coronavirus pandemic, as demand is feeble and manufacturers are on edge about the tariff turmoil.
Based on a survey of purchasing executives from around 400 manufacturing companies across Indonesia to determine business conditions, the PMI report published by S&P Global on Friday shows the index nosedived by 5.7 points to 46.7 in April from 52.4 in March.
April’s drop marks the first time in five months in which national manufacturing activity contracted, as indicated by readings below the 50-point threshold that separates expansion from contraction.
S&P Global Market Intelligence economist Usamah Bhatti wrote in the report that the headline PMI indicated the “sharpest deterioration in the health of the sector” since August 2021, when the country was still ridden with the COVID-19 pandemic.
"In response, firms engaged in retrenchment practices by scaling back purchasing and employment levels while also winding down stocks of inputs and finished items,” said Bhatti.
“The near-term outlook remains clouded, as manufacturers redirected capacity to complete outstanding business in the absence of sales, suggesting that the current malaise will extend into the coming months,” he added.
