The manufacturing sector in Indonesia experienced an accelerated contraction in August, according to the latest survey from S&P Global, which reported a Manufacturing PMI score of 48.9. This marks a decline from July's score of 49.3, further distancing itself from the critical threshold of 50 that demarcates expansion from contraction.
August saw concurrent declines in manufacturing production and new orders, with contraction rates reaching their highest levels since August 2021. Survey participants noted that market demand was softer compared to July, a key factor contributing to the reduction in new orders.
The decline in foreign orders also intensified, hitting the highest contraction rate since January 2023. Beyond the general weakness in export demand, some respondents indicated that global shipping challenges were adversely impacting sales. The drop in production and new orders has also led to some job losses in Indonesian manufacturing facilities.
