PMI Points To Solid Output Growth And Easing Inflationary Pressures
The S&P Global manufacturing PMI for October remained in expansionary territory, unlike many other Asian countries, but expanded at a slower pace than in September. The October index was 51.8 versus 53.7 in September, a 2-month low.
- The manufacturing PMI has been signalling growing output since August 2021.
- While cost pressures remained in the manufacturing sector, due to higher commodity prices, they eased to a 22-month low. Selling price inflation also moderated to below its long-run average. This should be welcome news to Bank Indonesia.
- Demand and output growth were both positive but moderated which also led to slower hiring and purchasing. However, business confidence improved significantly on better sales expectations.
- Foreign demand for Indonesian products declined again, apparently due to weaker economic growth overseas.
- There was a further lengthening of lead times reflecting continued supply constraints, including bad weather.
Source: MNI - Market News/Bloomberg/S&P Global