Indonesia Investments has reported that manufacturing activity in the country has tightened for the eighth continuous month in May 2015.
The HSBC Markit purchasing manager’s index stood at 46.7 in April. This figure rose to 47.1 in May, however still remaining below 50 and therefore representing a contraction in the market. Output, new orders and employment remain weak in Indonesia. It is therefore unlikely that Indonesian manufacturing will experience a sudden improvement in the near future. Output and new orders did however decrease at slower rates.
A decrease in foreign orders and purchasing activities accelerated to a new record level. For the tenth consecutive month, Indonesian manufacturers decreased employment in May as a result of declining new work and efforts to reduce operating expenses.
Slowing economic growth in Indonesia as a whole has resulted in the weak manufacturing data. Since 2011, the economy of Indonesia has been slowing as a result of sluggish global economic growth and the high domestic interest rate environment. In 1Q15, GDP growth slowed to a five-year low of 4.71%.
Edited from source by Joseph Green. Source: Indonesia Investments