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Jakarta Post

Indonesia’s factory activity falls to historic low in Q2

  • Adrian Wail Akhlas


Jakarta   /   Tue, July 14 2020   /  01:00 am
Women’s world: Workers produce cigarettes at a factory in Malang, East Java. The government has increased the tobacco excise as part of its efforts to boost state revenue.(JP/Aman Rochman)

Factory activity in Indonesia fell to its lowest level ever in the second quarter as the coronavirus pandemic caused a slump in demand and disrupted supply chains, a survey published by Bank Indonesia (BI) showed. BI’s Prompt Manufacturing Index (PMI-BI) was recorded at 28.55 percent, its deepest ever contraction, compared with 45.64 percent in the first quarter this year. An index reading above 50 indicates expansion while below 50 reflects contraction. The central bank survey showed that all component indexes, including overall output and new orders, declined for the second consecutive quarter. The production volume index was the lowest at 25.36 percent, followed by the order volume index at 28.95 percent and goods stock volume at 32.28 percent. “The contraction was due to lower demand and supply chain disruption amid the COVID-19 pandemic,” the central bank ...