Indonesia's Manufacturing Sector Growth Slows in May: S&P Global

Wahyu Dwi Anggoro - 02 June 2022 09:55 WIB
Indonesias Manufacturing Sector Growth Slows in May: S&P Global
The pace of improvement was the slowest seen over this period. (Photo:
Jakarta: Indonesia’s manufacturing sector saw a weaker improvement in overall operating conditions in May, according to the latest S&P Global PMI™ data. 

The S&P Global Indonesia Manufacturing Purchasing Managers’ Index™ (PMI™) posted 50.8 in May, down from 51.9 in April. 
This represented a ninth straight month of improving business conditions across the Indonesian manufacturing sector. 

That said, the pace of improvement was the slowest seen over this period and only marginal. 

Manufacturing output fell slightly amid supply constraints, with average delivery
times lengthening further in May, which also contributed to a renewed increase in backlogged work. 

Meanwhile, total new business and employment also expanded at softer rates compared to April. 

"Business conditions across Indonesia’s manufacturing sector improved at a slower pace in May, according to the S&P Global Indonesia Manufacturing PMI. Anecdotalevidence from the survey suggested that manufacturing production fell marginally midway into Q2 as supply constraints weighed on the sector," Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence, said in a press release on Thursday.

"The lengthening of suppliers’ delivery times, coupled with persistent and rapid increases in prices, highlighted the supply constraints affecting Indonesia’s manufacturing sector performance in May. The good news is that demand continued to rise, but it will be worth watching how much further manufacturing output may be affected going forward," the economist added.

Business sentiment regarding the 12-month outlook for output remained positive, but the overall level of optimism slipped to a three-month low in May.

"Business confidence eased again in May amongst Indonesian manufacturers, though the sustained growth of employment levels and purchasing activity reflected optimism amongst firms for future output, which were positive signs from the May PMI survey," the economist concluded.


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