Bank Indonesia (BI) reported business activity index in the third quarter (3Q) of 2019 slowed compared to the previous quarter - Photo by Asia Tower Sudirman

JAKARTA (TheInsiderStories) – Bank Indonesia (BI) reported business activity index in the third quarter (3Q) of 2019 slowed compared to the previous quarter, said the central bank on Thursday (10/10). This is reflected in the Weighted Net Balance of 13.39 percent lower from 19.17 percent in the previous quarter.

The slowing down of business activity mainly occurred in the agriculture, plantation, livestock, forestry and fisheries sectors, particularly in the food crops sub-sector which was affected by prolonged drought, said BI.

Nevertheless, the Bank was still considering that business activities are still going well. It was supported by the construction sector which was growing up. In line with the development of these business activities, the average production capacity in the third quarter of 2019 was lower than the average in the previous quarter.

The level of use of production capacity decreased, from 77.18 percent in the previous quarter to 75.42 percent in the third quarter of 2019. While, the level of labor usage was also lower, reflected in the value of the net weighted workforce of 2.47 percent in the previous quarter to 1.4 percent in quarter III-2019.

From the financial side, the condition of liquidity and profitability of the business community and access to credit are still quite good although relatively declining compared to the previous quarter, adds by the central bank.

Then, said BI, respondents predicted that business activities would continue to grow positively, although not as high as in the previous period. This is indicated from the Weighted Net BalanceĀ of business activity forecasts in the fourth quarter of 2019 of 9.13 percent.

Growth in business activity mainly supported by the construction sector and most of the tertiary sector. Optimism for future business activity is also reflected in investment forecasts and increased employment in the fourth quarter of 2019.

Meanwhile, the performance of the manufacturing sector in the third quarter of 2019 also recorded a slowdown compared to last quarter. This is reflected in the Bank Indonesia Prompt Manufacturing Index (PMI) of 52.04 percent in the third quarter of 2019, slightly lower than 52.66 percent in the second quarter of 2019.

The expansion phase occurred in almost all sub sectors, but a slowdown was observed in the food, beverage and tobacco sub-sector as well as textiles, leather goods and footwear. It said, the contraction that has occurred in timber goods and other forest products since the last quarter is seen to continue in 3Q of 2019.

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