Manufacturing Update: Activity Softening in June, But Rising Trend So Far in 2019
Manufacturing activity in Indonesia increased in June 2019 albeit at a much slower pace than in the preceding month. Expansion in the nation’s manufacturing sector was dragged down by softer expansion in both production and new orders.
The IHS Markit Indonesia Manufacturing Purchasing Managers’ Index (PMI) declined from 51.6 in May 2019 to a reading of 50.6 in June 2019, indicating a mild improvement in the health of Indonesia’s manufacturing sector (a reading above 50.0 exhibits expansion in manufacturing activity, while a reading below 50.0 indicates contraction). This headline index provides a quick snapshot of business conditions in the manufacturing sector, deriving its data from questions on orders, output, employment, suppliers' delivery times, and inventories.
Despite the slower growth pace in June 2019, we still detect a growing trend in manufacturing activity in Indonesia so far in 2019 (see the graph below) and, thus, business optimism among Indonesian manufacturers was maintained. The Future Output Index remained at the highest levels seen for two-and-a-half years, with goods producers expecting production growth to stem from planned business expansion, rising production capacity, promotional activity and greater client demand.
Read the full article in the June 2019 edition of our monthly research report. You can purchase the report by sending an email to info@indonesia-investments.com or a WhatsApp message to the following number: +62(0)8788.410.6944
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What do you think will be the growth rate of the Indonesian economy in full-year 2019?
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- 5.1% (or lower) (41.5%)
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- 5.2% (20.2%)
- No opinion (7.6%)
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