Manufacturing Expands in March, First Time in 18 Months
Jakarta. Indonesia's manufacturing industry showed signs of improvement in March, the first time it has done so since Sep. 2014. There were signs of expansion as production returned to growth territory, the Nikkei Indonesia Manufacturing purchasing managers' index survey revealed on Friday (01/04).
The PMI — a composite of manufacturing output, new orders, exports and employment measures — increased to 50.6 in March from 48.7 in February, ending a 17-month downward streak.
A higher level of production was the reason for the upturn, as the number of new orders expanded for the first time in 18 surveys.
"Indonesia's manufacturing output emerged from a prolonged slump in March, rising for the first time in one-and-a-half years. Production was boosted by improved domestic demand, which more than offset another fall in exports," Pollyanna De Lima, an economist at Markit who compiled the survey, said in a note.
The report said manufacturers kept their employee numbers broadly unchanged, reflecting, De Lima said, "positive news following job cuts in the past 19 months."
"Though the sector has finally moved into expansion territory, firms will still be looking for signs of a convincing recovery taking hold before hiring additional workers. If cost inflation continues to ease, Indonesian manufacturers may then look to gain a competitive edge through cutting output prices," she said.
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