JAKARTA (TheInsiderStories) – Indonesia’ business activities in the second quarter (2Q) of 2019 improved compared the previous quarter, according to the latest survey of Bank Indonesia. This is reflected in the weighted net balance of 19.17 percent, higher than 8.65 percent in the previous quarter.

However, the central bank said, on a year to year basis, the performance of business activities in 2Q 2019 was lower than 20.89 percent in the same quarter last year.

The increase in business activities occurred mainly in the trade, hotel and restaurant sector (4.17 percent) and the manufacturing industry sector (3.57 percent), driven by an increase in domestic demand.

The survey results noted an increase in business activities in the 2Q, among others, driven by seasonal factors in the high demand during Ramadan and Eid periods. The highest increase in business activities subsequently occurred in the finance, real estate and corporate services sector (3.01 percent) and the services sector (2.52 percent).

In line with the increase in business activities, the average production capacity used and the use of labor in the 2Q 2019 also increased compared to the previous quarter. The level of use of production capacity increased from 76.10 percent in the first quarter of 2019 to 77.18 percent in the 2Q 2019

Meanwhile, the increase in the level of employment was reflected in an increase in SBT in the number of workers from 2.37 percent in the first quarter of 2019 to 2.47 percent in 2Q 2019. In terms of finance, business liquidity and profitability were better, with relatively easy access to bank credit.

Respondents predict business expansion will continue, even though it is not as high as the previous period. This is reflected in the net balance forecasts for business activity in the 3Q 2019 of 16.19 percent. The forecast for expansion of business activities is supported by the Finance, Real Estate and Corporate Services sector and the Services sector.

Furthermore, the central bank saw that the company’s financial condition in 2Q was generally better than in the previous quarter, reflected in the net balance of company liquidity of 30.59 percent, up from 26.68 percent in the 1Q 2019.

In terms of ease of access to bank financing, respondents considered access to bank credit in the second quarter of 2019 was easier. The net balance of access to credit for the past 3 months was 6.89 percent, up from 6.05 percent in the 1Q 2019.

In line with the relatively well-maintained financial condition of the company, the majority of labor used in 2Q 2019 was indicated to increase with a net balance of 2.47 percent, higher than 2.37 percent in the previous quarter.

In line with the forecasted growth in business activity, employment in the third quarter of 2019 is predicted to continue to increase, although not as high as in the previous quarter.

Meanwhile, the selling price pressure in 2Q 2019 indicated an increase with a net balance value of 16.48 percent, higher than 15.34 percent in the previous period. The pressure to increase selling prices is predicted to decline in the third quarter of 2019 with a net balance of 14.48 percent.

The survey results also show that the average inflation rate in 2019 is predicted to reach 3.54 percent (YoY). The forecast is still in the range of the inflation target set by Bank Indonesia at 3.5 ± 1 percent.

Meanwhile, investment growth in the 2Q 2019 was relatively stable. This is indicated by the Weighted Net Balance of investment of 9.71 percent, relatively stable from 9.62 percent in 1Q 2019.

In line with the conditions of business activity, investment in the third quarter of 2019 is predicted to regain limited growth with investment forecasts of 9.32 percent, although lower than 9.71 percent in 2Q 2019.

The survey results indicate that in the semester, the number of business actors conducting investment activities in the first semester of 2019 is relatively stable compared to the number in the second semester of 2018.

Written by Staff Editor, Email: theinsiderstories@gmail.com