Indonesia’s manufacturing output slumps to record low

Photo: Antara

Indonesian manufacturing output dropped drastically in March as the government imposed stricter measures to contain the coronavirus spread. According to market survey firm IHS Markit, Indonesia’s Purchasing Managers Index, the gauge for manufacturing activities, slumped to 45.3, the worst in the survey’s nine-year history. An index reading above 50 reflects an expansion, while a value below 50 indicates a contraction.

“Under stricter antivirus measures, demand weakened sharply at the end of the first quarter. New business inflows fell at the fastest rate in the survey’s history, dragged down by a plunge in export sales,” IHS Markit said in a statement.

“At the same time, factory shutdowns led to a marked drop in production, with output also falling at a survey record rate,” it added.

The manufacturing output contributed around 19 per cent of the country’s economic activity in last year’s fourth quarter, Statistics Indonesia data showed.

The government has projected the country’s economy to grow at the lowest level since 1999 of 2.3 per cent this year under the baseline scenario, or contract by 0.4 per cent in the worst-case scenario as the pandemic keeps stifling business activity.

Automotive industry hit hard by virus crisis

The automotive industry, for instance, has seen significant disruption. Car manufacturers PT Suzuki Indomobil Motor and PT Honda Prospect Motor have said they will halt their car productions in Indonesia for two weeks from April 13 to 24 in an effort to curb the spread of the coronavirus.

Meanwhile, PT Toyota Motor Manufacturing Indonesia is limiting the number of its operating personnel and activities.

Industry Minister Agus Gumiwang Kartasamita acknowledged in a press statement on April 2 that several manufacturing sectors were enduring production drops of nearly 50 per cent, except for those related to medicines and medical equipment.

He said his ministry would be proposing various fiscal and non-fiscal stimulus measures to anticipate the negative impact of worldwide lockdowns on the local and global market. The measures would also aim to ease raw material imports and reduce both corporate and personal income taxes.

Photo: Antara Indonesian manufacturing output dropped drastically in March as the government imposed stricter measures to contain the coronavirus spread. According to market survey firm IHS Markit, Indonesia’s Purchasing Managers Index, the gauge for manufacturing activities, slumped to 45.3, the worst in the survey’s nine-year history. An index reading above 50 reflects an expansion, while a value below 50 indicates a contraction. “Under stricter antivirus measures, demand weakened sharply at the end of the first quarter. New business inflows fell at the fastest rate in the survey's history, dragged down by a plunge in export sales," IHS Markit said in...

Photo: Antara

Indonesian manufacturing output dropped drastically in March as the government imposed stricter measures to contain the coronavirus spread. According to market survey firm IHS Markit, Indonesia’s Purchasing Managers Index, the gauge for manufacturing activities, slumped to 45.3, the worst in the survey’s nine-year history. An index reading above 50 reflects an expansion, while a value below 50 indicates a contraction.

“Under stricter antivirus measures, demand weakened sharply at the end of the first quarter. New business inflows fell at the fastest rate in the survey’s history, dragged down by a plunge in export sales,” IHS Markit said in a statement.

“At the same time, factory shutdowns led to a marked drop in production, with output also falling at a survey record rate,” it added.

The manufacturing output contributed around 19 per cent of the country’s economic activity in last year’s fourth quarter, Statistics Indonesia data showed.

The government has projected the country’s economy to grow at the lowest level since 1999 of 2.3 per cent this year under the baseline scenario, or contract by 0.4 per cent in the worst-case scenario as the pandemic keeps stifling business activity.

Automotive industry hit hard by virus crisis

The automotive industry, for instance, has seen significant disruption. Car manufacturers PT Suzuki Indomobil Motor and PT Honda Prospect Motor have said they will halt their car productions in Indonesia for two weeks from April 13 to 24 in an effort to curb the spread of the coronavirus.

Meanwhile, PT Toyota Motor Manufacturing Indonesia is limiting the number of its operating personnel and activities.

Industry Minister Agus Gumiwang Kartasamita acknowledged in a press statement on April 2 that several manufacturing sectors were enduring production drops of nearly 50 per cent, except for those related to medicines and medical equipment.

He said his ministry would be proposing various fiscal and non-fiscal stimulus measures to anticipate the negative impact of worldwide lockdowns on the local and global market. The measures would also aim to ease raw material imports and reduce both corporate and personal income taxes.

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