Indonesia's Manufacturing Industry Weakens, Thailand Remains Expansive

Adi Ahdiat 05/09/2024 14:31 WIB

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Indonesia's manufacturing sector weakened in August 2024. Meanwhile, the industries in several neighboring countries such as Vietnam, Thailand, and the Philippines remained expansive.

ASEAN Manufacturing Purchasing Managers' Index (PMI) (July-August 2024)

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ASEAN Manufacturing Purchasing Managers' Index (PMI) (July-August 2024)

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Indonesia's manufacturing sector weakened in August 2024, while neighboring countries such as Vietnam, Thailand, and the Philippines saw continued industry expansion.

This is evident from the manufacturing Purchasing Managers' Index (PMI) report released by S&P Global.

The PMI is an index reflecting monthly industrial growth. This index is compiled from a survey of managers from hundreds of sample companies in each country.

Survey variables include production volume growth, export and domestic orders, workforce size, supply delivery times, and the stock of materials purchased by each company.

The survey results are then processed into a score on a scale of 0-100. A PMI score below 50 reflects a weakening; a score of 50 indicates stability or no change; and a score above 50 indicates strengthening or expansion compared to the previous month.

In August 2024, the manufacturing PMI scores for Vietnam, Thailand, and the Philippines remained above 50, indicating expansion, although the rate was the same or not as strong as the previous month.

On the other hand, the scores for Malaysia, Indonesia, and Myanmar were below 50, reflecting a contraction or decline in business in both July and August 2024.

According to Maryam Baluch, an economist at S&P Global Market Intelligence, the ASEAN manufacturing industry generally experienced a decline in demand.

"Recent data reveals a slowdown due to declining foreign demand continuing to hinder growth," said Maryam in a press release on Wednesday (September 4, 2024).

"The employment picture appears bleak. Although capacity pressure increased, companies reported a slight decrease in the number of employees. Companies chose to continue using inventory to meet organizational needs," she continued.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."