JakartaPost-Oct 1
Indonesian manufacturers remain concerned about output and new orders but an uptick in employment for the first time in three months indicates cautious optimism for the future. The latest manufacturing purchasing managers’ index (PMI) report published by S&P Global on Tuesday rose slightly to 49.2 in September from 48.9 in August. This marks the third consecutive month the index has remained below the 50-point threshold that separates expansion from contraction. The monthly PMI report is based on a survey of purchasing executives from around 400 manufacturing companies across the country to gauge business conditions in the sector. “The underwhelming performance of the Indonesian manufacturing economy was linked to a generally subdued global macroeconomic environment during September,” Paul Smith, economics director at S&P Global Market Intelligence, said in a statement accompanying the report’s publication. “Still, firms increased their employment numbers as they looked toward brighter times ahead. Confidence in the outlook also improved in September to its highest level for seven months,” he added.
According to the S&P Global report, the manufacturing PMI last month was dragged down primarily by monthly reductions in both production and new orders. Global conditions are weighing on the sector, the report shows, as new export business declined at the steepest rate since November 2022. As a result of lower production and new orders, purchasing activity and inventories also declined. “Firms naturally responded [to weaker demand] by reducing their buying activity, preferring instead to utilize inventories and maintain tight controls over costs and operating efficiency,” Smith explained. When the PMI index fell below the 50-point mark in July for the first time since August 2021, the Indonesian Employers Association’s (Apindo) Bobby Gafur Umar warned that the slumping manufacturing sector could drag down economic growth in the second half of the year. ” Read more at: https://www.thejakartapost.com/business/2024/10/01/mood-improves-among-indonesian-manufacturers.html.
