Jakarta: The latest Prompt Manufacturing Index-Bank Indonesia (PMI-BI) slipped below the 50-point threshold that separates expansion from contraction in the manufacturing sector at 48.75% in the third quarter of 2021 from 51.45% in the previous period.
Notwithstanding, the contraction was shallower than the 44.91% recorded in the third quarter of 2020.
The lower PMI-BI confirms recent findings published in the Business Survey (SKDU), which also indicated a moderate contraction amid covid-19 restrictions enforced in the third quarter of 2021.
Declines were recorded across all PMI-BI components, with supplier delivery times, labour, production volume and inventory positioned in a contractionary phase.
By subsector, most respondents reported weaker performance in the third quarter of 2021, with the lowest index readings affecting Wood Products and Other Forest Products, Transportation Equipment, Machinery and Apparatus as well as Fertilisers, Chemicals and Rubber Products.
"In the fourth quarter of 2021, respondents predicted manufacturing industry performance to charge into an expansionary phase, with the PMI-BI increasing to 51.17% on the back of all components, primarily production volume, order volume and inventory, which moved into expansionary territory," BI Communication Department Group Head Muhammad Nur said in a press release on Wednesday.
Furthermore, respondents expected most subsectors to improve, led by Paper and Printing, Cement and Non-Metallic Mineral Products.