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View all search resultsManufacturing PMI rises but output, demand remain weak
Indonesia’s manufacturing activity has improved but remains in negative territory due to weak output and demand, while producers’ confidence is at a low due to US tariff jitters.
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A worker installs a battery into the chassis of a Hyundai IONIQ 5 on April 6, 2023, at the assembly plant of Hyundai Motor Manufacturing Indonesia (HMMI) in Cikarang, West Java. (JP/Rachmat Kurniawa)
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omestic manufacturing activity has improved but remains in negative territory, as output and demand are weak while producers’ confidence is at a low due to concerns over United States tariffs.
According to the latest monthly report from S&P Global, the manufacturing purchasing managers’ index (PMI) for Indonesia rose to 49.2 in July from a reading of 46.9 in June.
It marks the fourth consecutive month the country’s manufacturing PMI has come in below the 50-point threshold between expansion and contraction.
Manufacturers saw muted new orders, though the survey showed the decline rate was modest, as well as the softest in the past four months.
"July's survey data indicated another negative month for the health of the Indonesian manufacturing economy. Downturns in output and new orders were sustained at the start of the third quarter, but eased from June.” Usamah Bhatti, an economist at S&P Global Market Intelligence, said on Friday.
“At the same time however, there was a renewed fall in new export orders while firms remained in retrenchment mode, as indicated by falling employment and purchasing levels,” Bhatti added.
Companies bought fewer materials in July, citing lower production requirements as they tried to use up existing stock. This extended the decline in purchasing activity for four consecutive months.
