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Jakarta Post

Manufacturing expansion slows down in June

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, July 4, 2018   /   04:02 pm
Manufacturing expansion slows down in June Steel rolls are unloaded at Tanjung Priok Port in North Jakarta on April 4. (Antara/Sigid Kurniawan)

Expansion in the manufacturing sector has begun to slow down, as indicated by Indonesia's decline in the Nikkei and Markit Purchasing Managers' Index (PMI) in June.

Indonesia's PMI in June was at 50.3, a decrease from the 51.7 recorded in the previous month and its lowest index in the last five months.

Scores higher than 50 indicate expansion in the industry, while figures below 50 indicate contraction.

IHS Markit economist Aashna Dodhia attributed the decline to Bank Indonesia's decision last week to raise its reference rate by 50 basis points.

“It indicates that there is a challenge for policymakers in ensuring financial stability without sacrificing economic growth in the coming months,” Aashna said as reported by on Tuesday.

However, Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman Shinta Widjaja Khamdani held a different opinion.

She said Indonesia’s industry was still growing, as indicated by the import value for raw materials at US$57.96 billion from January to May, a 22.59 percent growth compared to the corresponding period of last year.

Meanwhile, total exports from January to May were recorded at 54.45 billion, a growth of 6.15 percent year-on-year.

“We can learn from the orientation of the manufacturing industry. Export-oriented industry is still good and domestic consumption is still OK. There is no indication of a decline,” she added. (bbn)