Manufacturing Activity Indonesia Contracts for 12th Straight Month in September
For the 12th consecutive month Indonesia's manufacturing activity contracted as output and new orders declined. The Nikkei/Markit purchasing managers' index (PMI) fell to 47.4 in September 2015 from 48.4 in the preceding month and below analysts' forecasts (a reading of 50.0 separates contraction from expansion). September's contraction was the second-fastest drop in Indonesia's manufacturing activity since the index was started in early 2012.
Both Indonesia's manufacturing output and new orders in September fell the most since June on weaker client confidence and on declining new export orders from Asia and Europe. As a consequence of weak conditions in the nation's manufacturing sector, Indonesian manufacturers reduced the number of employees further.
Manufacturing PMI Indonesia:
Meanwhile, the significantly weakened rupiah rate (which has depreciated nearly 18 percent against the US dollar so far in 2015) causes higher import costs. Therefore, manufacturers raised their selling prices during the last month. This contributes to Indonesia's still relatively high inflation pace of 6.83 percent (y/y) in September. However, inflation is expected to ease markedly ahead of the new year as the impact of last year's subsidized fuel price hike wanes.