Indonesia’s Manufacture Purchasing Managers’ Index Plunged in July

IHS Markit reported that Indonesia’s Purchasing Managers’ Index (PMI) plunged to 40.1 points in July from 53.5 in June. This was the first contraction in factory activity in 9 months and the steepest pace since June 2020, amid greater restrictions around mobility following the second wave of COVID-19 and the implementation of PPKM.

Both output and new orders shrank fastest since May 2020, while export orders fell for the first time in 4 months and at a rate quicker than the drop in new work. Also, manufacturers switched to lowering their employment and reduced their buying level and stocks of inputs. Meanwhile, supply constraints persisted, with suppliers’ delivery times worsening at the steepest rate since May 2020, while the level of backlogged work remained almost unchanged.


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