Indonesia’s manufacturing sector showed signs of recovery in August, with a key industry gauge lifting for the first time since May on the back of improved output and strong export orders. The Nikkei-Markit manufacturing purchasing managers’ index for Indonesia lifted to 50.7 in August from 48.6 July, climbing above the 50-point line that separates expansion from contraction. Following four months of uninterrupted growth earlier in the year, the index slipped into contraction in June and July.
In August, however, companies boosted production as new export orders rose at the second-fastest pace in the survey’s near six-and-a-half year history. Markit economist Pollyanna De Lima noted business conditions in Indonesia had improved midway through the third quarter. “In response to higher inflows of new work, manufacturers stepped up production and purchased greater quantities of inputs in August,” she said. She added that the rebound had “lifted spirits among firms, who are more cheerful about the year-ahead outlook then they were in the prior survey period”.
