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Indonesia manufacturing contracts to record low: PMI
[JAKARTA] Indonesia's manufacturing activity contracted in November to its weakest level since early 2011 due to sharply weaker output and new orders, a private survey showed on Monday.
The HSBC Markit Purchasing Managers' Index (PMI) fell to 48.0 in November, the lowest reading since the survey began in April 2011.
That was down from 49.2 in October. A reading below 50.0 signals a contraction in activity.
Business conditions in Southeast Asia's biggest economy have now deteriorated in three of the past four months, marked with the fastest contraction in output since January 2012, a news release from HSBC said.
New orders fell for the third time in four months, while a fuel price increase around mid-month pushed up manufacturers'costs. As a result, companies cut staff for the fourth straight month. "The fuel price hike in November was a factor behind the record-low PMI reading. But weak external demand was also a key driver, with the new export orders index at a 13-month low,"said Su Sian Lim, economist at HSBC. "This, coupled with the fact that work backlogs continued to decline for a sixth month in a row, suggests that manufacturing sector conditions are likely to remain soft in the coming months, even after the effects of the fuel price hike are absorbed," Mr Lim added.