Conditions in Indonesia's manufacturing continued to soften during Nov

New orders fell for a fifth month in a row, whilst employment declined.

More positive, however, was an increase in production for the first time in five months, and stocks were bolstered in line with expectations of growth in the year ahead.

Confidence in the outlook improved to a nine-month high.

The headline seasonally adjusted S&P Global Indonesia manufacturing purchasing manager’s index (PMI) posted below the crucial 50 no-change mark that separates growth from contraction for a fifth successive month.

However, a rise in the index to 49.6 in November from 49.2 in October signalled the slowest deterioration in operating conditions in the current sequence.

Central to this rise was an expansion in production for the first time in five months. Growth occurred despite a reduction in new orders where firms noted that demand for goods remained underwhelming, S&P Global said in a release.

Quiet market activity was reported in the country, characterised by weak purchasing power amongst clients. New export orders declined as well, falling for a ninth successive month and to a stronger degree.

With output rising, but new orders down, excess production was used to help clear work outstanding and build warehouse inventories. Backlogs of work have now declined for six successive months, albeit only marginally in November.

Stocks of finished goods increased at a faster rate in the month, with modest growth helping firms to prepare for expected higher sales in the months ahead.

Companies are hopeful of a pick-up in demand and new orders over the next year, which should bolster production. Purchasing activity also improved during November, increasing for the first time in five months.

Less positive was a second successive monthly decline in employment volumes. Although modest, the contraction was the steepest recorded by the survey in over three years.

Fibre2Fashion News Desk (DS)