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Indonesia manufacturing activity contracts for 9th month in June: survey

Wednesday, July 1, 2015 - 11:08
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Indonesia's manufacturing activity contracted for the ninth straight month in June on persistent declines in new orders and production, suggesting Southeast Asia's biggest economy may have cooled further after hitting near 6-year lows in the first quarter.

[JAKARTA] Indonesia's manufacturing activity contracted for the ninth straight month in June on persistent declines in new orders and production, suggesting Southeast Asia's biggest economy may have cooled further after hitting near 6-year lows in the first quarter.

The Nikkei/Markit Indonesia purchasing manager's index (PMI) rose slightly to 47.8 in June from 47.1 in May, but remained well below the 50 level that separates contraction from expansion.

For the second quarter, the index averaged 47.2, the lowest quarterly reading since data was first collected in early 2011, said Pollyanna De Lima, economist at Markit. "This indicates that GDP growth is likely to have eased further from Q1," Ms De Lima said.

However, while new orders from abroad contracted for the ninth straight month, the rate of decline was the slowest since February.

This may provide some relief to government policy makers, who see a slight improvement in gross domestic product in the second quarter due to increased public spending.

Annual growth slowed to 4.71 per cent in January-March, the weakest since 2009, as a corruption scandal and red tape knocked government spending while exports also sagged.

REUTERS

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