Indonesia: Manufacturing PMI falls further below threshold in August
The S&P Global Indonesia Manufacturing Purchasing Managers’ Index (PMI) fell to 48.9 in August from 49.3 in July. As a result, the index moved further below the 50.0 no-change threshold, and signaled a faster deterioration in manufacturing-sector operating conditions compared to the previous month.
The latest PMI reading was driven by steeper declines in both output and new orders. Market demand softened, with foreign orders declining sharply due to global shipping challenges. Consequently, manufacturers reduced headcounts and purchasing activity, which led to a decrease in input stocks.
Regarding costs, input price inflation eased to its lowest level in ten months, although supply-side constraints and unfavorable exchange rates kept prices elevated. Meanwhile, business sentiment remained positive in August, with manufacturers expressing confidence in future production increases, albeit with slightly less optimism than in July.