Manufacturing Activity Indonesia Contracts in February 2017

Indeed, matters deteriorated in February for Indonesia's manufacturing economy.

Growth in both output and orders accelerated last month, according to official and private factory surveys on Wednesday, giving the government more room to focus on tackling financial risks to the economy as debt continues to rise.

It said, "At 50.7 in February, up from 50.4, the seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index - a composite indicator created to provide a single-figure snapshot of the performance of the manufacturing economy - was above the neutral 50.0 value for the second month running and indicated that the health of the sector improved to a greater extent than in January".

Readings above 50.0 signal an expansion in activity.

China's January exports beat expectations, bolstering views that global demand is improving, but the trade outlook is being clouded by worries about the impact that rising US trade protectionism could have on the world's largest exporter.

China's manufacturing sector has seen a sustained recovery since the second half of past year as a booming housing market and government infrastructure spending boosted construction and as banks extended a record amount of credit.

It also marks a 35-month high score.

Analysts had expected a reading of 51.1 in February. Purchasing power of consumers reportedly fell, especially that of foreign customers as new export orders fell for the fifth straight month amid challenging global economic conditions.

Still, China's domestic demand appears solid for now, and is becoming more broad-based. However, February's PMI recorded the above-50 level for the sixth consecutive month.

In a recent development, the Nikkei Japan PMI index is out and has reflected a healthy growth in the manufacturing sector in February. It rose to 51.7 last month from 51.0 in January, near the four-year high of 51.9 posted at the end of 2016.

South Korea said on Wednesday that its exports grew at the fastest pace in five years in February, with shipments to China surging 28.7 percent on-year, the best growth since late 2010.

  • Zachary Reyes