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Domestic manufacturing industry weakens as demands drop

Tempo - November 4, 2019

Vindry Florentin, Jakarta – The IHS Markit report on the Indonesian manufacturing industry's Purchasing Managers Index (PMI) showed a dropping trend in the manufacturing industry's demands for domestically produced goods.

IHS Markit's Principle Economist Bernard Aw stated that Indonesia's October PMI was at the level of 47.7 which slumped since May of 2019. This index is even closing-in on the lowest position since November 2015 of 46.4.

According to Bernard quoted from Tempo's newspaper "Koran Tempo", the constant weakening of domestically produced goods has sparked the drop in production apart from reports of inventory increase on unsold goods that potentially reduces the amount of production in the following months.

Moreover, the Center of Reform on Economics (CORE) economist Yusuf Rendy Manilet says that the manufacturing sector's weakening is a trend for the past three years.

"There is an early symptom of deindustrialization caused by driving factors such as the manufacturing industry that is not running at an optimum rate," said Yusuf.

He also highlights the lack of support shown by the Indonesian government for the domestic manufacturing industry's financing.

Source: https://en.tempo.co/read/1267982/domestic-manufacturing-industry-weakens-as-demands-drop