Does Factory Gauge Contraction Signal a Manufacturing Doom?

By Editorial Team 03/10/2019
Crisis
Summary

IHS Markit's research shows that Indonesia's Manufacturing Purchasing Managers Index (PMI) reached 49.2 in the third quarter of 2019, the lowest since the end of 2016. A PMI reading below 50 represents a contraction in the manufacturing sector. According to IHS Markit, overall demands are declining, as reflected in lower orders in August and September.

Weak domestic and external demand had caused lower production. Companies adjusted their operations amid declining sales. In its report released on Wednesday (10/2), the London-based global information provider stated the average Indonesian Manufacturing PMI in the third quarter was consistent with economic growth of five percent in the same period. HIS estimates Indonesian manufacturing is still sluggish despite the positive prospects for the long term.

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