Bank Indonesia (BI) says expansion of the manufacturing sector has started to slow down after obtaining high growth in the third quarter. BI Governor Perry Warjiyo said over the weekend that the prompt manufacturing index (PMI) in the third quarter was above 50 percent, indicating that there was growth but it was slower than during the previous quarter. A PMI lower than 50 percent indicates contraction.

According to the BI, PMI was recorded at 52.4 percent in the second quarter, the highest since 2015, and 52.02 percent in the third quarter. It is projected at 51.9 percent in the fourth quarter. The central bank said manufacturing sector expansion in the third quarter was mainly pushed by an increase in the production volume index to 55.18 percent from 54.39 percent in the previous quarter, due to high domestic demand.

Meanwhile, the supply volume index was 54.10 percent in the third quarter, compared to 53.13 percent in the previous quarter.

“The increase in the production volume was not only because of an increase in orders but also because of an increase in inventory, indicating that the manufacturing sector anticipates future orders,” Perry said as quoted by >kontan.co.id.

The increase in the production volume index helped maintain the employment index at 50 percent, the central bank said. Perry said the manufacturing sector would continue to expand in the fourth quarter because of domestic market demand in the lead up to Christmas and New Year's.

Source: http://www.thejakartapost.com/news/2018/10/29/bi-sees-slowdown-in-manufacturing-expansion-in-q4.html