Jakarta city center (Photo: Medcom.id)
Jakarta city center (Photo: Medcom.id)

Indonesian Manufacturing Sector's Growth Slows in June 2022

Wahyu Dwi Anggoro • 01 July 2022 10:03
Jakarta: Indonesia's manufacturing sector continued to see an improvement in operating conditions in June, albeit at the slowest rate in ten months, according to S&P Global.
The headline seasonally adjusted S&P Global Indonesia Manufacturing Purchasing Manager’s Index™ (PMI™) posted at 50.2 in June, down from 50.8 in May. 
The headline PMO has now posted above the 50.0 no-change mark for ten successive months. 

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That said, June's PMI reading slipped to the lowest in the aforementioned sequence, posting only fractionally above the 50.0 neutral threshold and pointing to only a slight improvement in the health of the sector.
"The general health of Indonesia's manufacturing sector was close to stagnating in June, according to S&P Global PMI data. Order book volumes expanded at the slowest rate in ten months, with some noting the upturn in output was attributed to efforts to boost post-production inventories. At the same time, foreign demand contacted at the sharpest rate since September 2021, signalling that the overall demand expansion is currently being upheld by domestic order books," Laura Denman, Economist at S&P Global Market Intelligence, said in a press release on Friday.
"According to June data, price pressures have remained persistent as firms continued to opt to share greater raw material costs with their customers. Price hikes remain a downside risk to growth, and should inflation continue to worsen domestic demand may be hit, which could mean the Indonesian manufacturing sector experiences a further loss of growth momentum," Denman added.
Meanwhile, optimism across the Indonesian manufacturing sector was seen once again in June. 
Hopes of continued economic improvement and strengthening demand conditions were
widely commented upon as driving confidence. 
That said, the overall level of positive sentiment dipped to a fourmonth low.

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