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Indonesia factory activity contracts for second straight month in August
The manufacturing Purchasing Managers' Index (PMI) rose slightly to 43.7 in August from 40.1 in July, contracting for the second month in a row, IHS Markit reported Wednesday.
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West Java Governor Ridwan Kamil (right) observes COVID-19 rapid tests for workers at a Suzuki plant in Cikarang, Bekasi regency, West Java during a visit on Sept. 4, 2020. (Antara/Fakhri Hermansyah)
I
ndonesia’s manufacturing sector contracted by a smaller degree in August compared with July, as the country remained under strict mobility restrictions (PPKM).
The country’s manufacturing Purchasing Managers’ Index (PMI) rose to 43.7 in August from 40.1 in July, business information company IHS Markit reported Wednesday.
The latest figure, which falls below the 50-point threshold separating expansion and contraction, marks a downturn in factory activity for two consecutive months.
Output and new orders fell at a slower pace in August than in July, but pandemic restrictions still weighed on production and demand, causing manufacturers' purchasing activity to fall, wrote IHS Markit.
“The good news, however, is that things appear to be improving from July in line with the decline in COVID-19 cases in Indonesia. This was shown by the easing in the rates of decline for both demand and output compared to July,” said IHS Markit economics associate director Jingyi Pan in the press release.
The government eased restrictions on export-oriented companies in certain areas starting last month, helping improve the performance of the manufacturing sector, which is the largest contributor to Indonesia’s gross domestic product (GDP).
Read also: Manufacturing growth comes to abrupt halt, new orders drop
