COVID-19 forces Indonesia’s manufacturing activities to sharply decline

A corner of Jakarta, Indonesia (Source: AFP/VNA)

Jakarta (VNA) - Indonesia’s manufacturing activities fell off a cliff in March as the government imposed stricter measures to contain the spread of the COVID-19, a survey has showed.

According to IHS Markit, Indonesia’s Purchasing Managers Index (PMI) slumped to 45.3, the worst in the survey's nine-year history.

Under stricter antivirus measures, demand weakened sharply at the end of the first quarter, the survey stated.

Meanwhile, new business inflows fell at the fastest rate in the series history, dragged down by a plunge in export sales.

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

Manufacturing made up around 19 percent of the country’s gross domestic product (GDP) in the fourth quarter of 2019, Statistics Indonesia (BPS) data showed.

The government has projected the local economy to grow at the lowest level since 1999 of 2.3 percent this year under the baseline scenario, or expand by 0.4 percent in the worst-case scenario if the pandemic still lingers on.

While it has yet to impose a lockdown, the Indonesian government in mid-March called on citizens to stay at home to curb the pandemic. This has disrupted business activities and hit people’s purchasing power as a sizeable proportion of the workforce was forced to take unpaid leave or even laid off./.