Indonesia's Manufacturing Sector Growth Slows in October 2023

The expansion of Indonesia's manufacturing sector slowed in October 2023.

IDXChannel - The expansion of Indonesia's manufacturing sector slowed in October 2023.

The headline seasonally adjusted S&P Global Indonesia Manufacturing Purchasing Manager’s Index (PMI) fell from 52.3 in September to 51.5 in October. 

Posting above the 50.0 no-change mark, the latest reading signalled that conditions in the manufacturing sector improved for a twenty-sixth consecutive month, albeit at the slowest pace since May.

"PMI data indicate that Indonesia's manufacturing sector continued to expand at the start of the fourth quarter. That said, further signs of slowdown in growth momentum have manifested, including a second successive slowdown in new order growth and a fresh contraction in new export orders," Jingyi Pan, Economics Associate Director at S&P Global Market Intelligence in a media release on Wednesday (1/11/2023).

"The level of business confidence among manufacturers also slipped further below the series average to signal reduced optimism regarding output over the next 12 months," the economist added.

Optimism around the year-ahead outlook for output slipped to its lowest level in eight months. According to panellists, business confidence waned due to increased uncertainty around the global economic outlook. 

"As a result of slower sales growth, firms lowered their employment levels slightly and limited any increases in selling prices in October, reflecting more conservative business decisions," Pan stated.

The softer rate of selling price inflation is expected to support more muted inflation for the Indonesian economy, however, which bodes well against a backdrop of increased uncertainty," Pan concluded. (WHY)