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Jakarta Post

Manufacturing sector moves slower in November

  • News Desk

    The Jakarta Post

Jakarta   /   Tue, December 4, 2018   /   01:46 pm
Manufacturing sector moves slower in November Activities in an automotive assembly plant for Suzuki cars in Bekasi, West Java, in this file photo. (Kompas/Totok Wijayanto)

The manufacturing sector in Indonesia grew slower in November, as indicated by a decline in the purchasing managers’ index (PMI), according to a Nikkei and IHS Markit report.

November’s index stood at 50.4, lower than 50.5 in the previous month, the lowest level in the last five months.

IHS Markit principal economists Bernard Aw said the Indonesian manufacturing sector lost the momentum to grow in the fourth quarter.

He added that he did not foresee a better performance in the manufacturing sector in the near future.

“The new demand is still stagnant, while the export is still declining,” said Aw as quoted by on Tuesday.

A PMI score higher than 50 indicates expansion in the industry, while figures below 50 indicate a contraction.

The report explains that a number of factors had caused the decline in the manufacturing sector, including a strengthening US dollar, bad weather and a lack of raw materials.

The demand throughout November was similar to that in the previous month, while exports have declined in the last 12 months.

The Nikkei, however, estimated that output in Indonesia would still move positively next year thanks to the launch of new products, capital investments, sales increases and promotional activities.

“The long-term prospect is still promising because generally, companies expect an output increase next year,” he added. (bbn)