Manufacturing PMI of Indonesia Hits New Record in May 2014
Indonesia's HSBC Markit purchasing managers' index (PMI) reached its highest level ever at 52.4 in May 2014, up from 51.1 in April 2014, as new domestic orders rose (indicating an improvement in domestic activity). According to HSBC economist Su Sian Lim, the outcome may be evidence that the slowdown in domestic manufacturing is starting to bottom out. In the previous two months, the index indicated slowing manufacturing activity in Southeast Asia's largest economy although remained above the 50.0 level for nine straight months.
A reading above 50.0 indicates that manufacturing activity is expanding, while a reading below 50.0 indicates a contraction.
Lim continued to state that the higher index was supported by Indonesian companies' increasing levels of new work, strengthening demand and successful launches of new products in Indonesia. Meanwhile, business from abroad increased for the fifth consecutive month.
The Ministry of Industry targets a six percentage growth pace (year-on-year) for Indonesia's manufacturing sector. This figure has been revised down from an initial 6.4-6.8 percent. Industry Minister MS Hidayat said that the country's slowing manufacturing growth is caused by the ban on export of unprocessed minerals as well as rupiah depreciation. Last year, manufacturing grew 6.19 percent.
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