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Why Indonesia’s Manufacturing Activity Weakened in March

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Indonesia’s manufacturing purchasing managers’ index

According to Markit Economics, Indonesia’s (IDX) (ASEA) manufacturing activity witnessed a weaker rise in March than in February. Its manufacturing PMI (purchasing managers’ index) stood at 50.7 in March and 51.4 in February.

Indonesia’s March manufacturing PMI was mainly driven by the following factors:

  • Production volume and output grew at a softer pace.
  • New orders rose at a softer pace.
  • New export orders fell for a fourth consecutive month.
  • Employment in the manufacturing sector rose marginally.

Economic improvement in Indonesia, an important nation in Asia, is a positive sign for the region as well as for emerging economies. However, growing trade war uncertainty has impacted global sentiment, and developed and emerging economies.

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Market impact

The VanEck Vectors Indonesia ETF (IDX), which tracks Indonesia’s economy, fell 5.5% in March, while the Global X FTSE Southeast Asia ETF (ASEA), which tracks Southeast Asia’s economy, fell 1.3%. In the next part of this series, we’ll list the indicators investors should watch this week.

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