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Factory activity slows as Indonesia deals with rising cases, deaths
Indonesia's manufacturing purchasing managers' index (PMI) slowed to 53.2 in June from 55.3 in May as the country grappled with a fresh wave of COVID-19 cases and deaths.
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Still expanding: Work continues at an Isuzu factory in East Karawang, West Java, on Aug. 3, 2020, despite reduced demand during the coronavirus pandemic. Factory activity in Indonesia slowed in June 2021 but remained higher than in some other countries of the region. (JP/Seto Wardhana)
F
actory activity in Indonesia slowed in June after three consecutive months of record-high expansion as the country faced a fresh wave of COVID-19 cases and deaths.
The manufacturing purchasing managers’ index (PMI), a gauge of factory activity based on a monthly survey of 400 manufacturers, stood at 53.2 in June, lower than the record-high 55.3 a month earlier, business consultancy IHS Markit reported on Thursday.
The latest reading, which marks the first slowdown in three months, was a result of easing new export work, output and new order growth as well as slower purchasing activity due to a more cautious attitude among firms, the company wrote.
“Growth of the manufacturing sector slowed in June, as shown by the latest IHS Markit PMI survey, and reflects the impact of the second COVID-19 wave upon the Indonesian manufacturing sector,” IHS Markit economics associate director Jingyi Pan was quoted in a press release as saying on Thursday.
The manufacturing sector, the largest contributor to the country’s GDP, is set to face further pressure as the government tightens mobility restrictions across Java and Bali to curb the virus, including by ordering people in nonessential sectors to fully work from home from July 3 through 20.
Read also: Indonesia's PMI hits record high third month in row
Manufacturers also reported a longer lead time due to the worsening pandemic, which hit supplier performance. With production continuing while purchasing activity slowed, raw materials and semi-finished items depleted.
