Positive Business Activity Maintained Despite Growth Decelerating - Bank Sentral Republik Indonesia
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October 23, 2019

The latest Business Survey conducted by Bank Indonesia pointed to positive growth maintained in the third quarter of 2019 despite decelerating compared with conditions in the previous period. Such conditions were reflected by a weighted net balance (WNB) of 13.39%, down from 19.17% in the second quarter of 2019. The increasing of construction activity had been being the main factor to the positive growth. On the other hand, the main drag on growth was the Agricultural, Plantation, Livestock, Forestry and Fisheries sector, the food crop subsector in particular, due to prolonged drought.

Congruent with slower business expansion, the most recent Business Survey also revealed lower production capacity and labour utilisation in the third quarter of 2019, that reflected by the average of production capacity 75,42% down from 77,18% in the previous quarter. Financially, businesses maintained solid liquidity and profitability in the reporting period, with relatively easy access to loans, notwithstanding declines compared with conditions in the second quarter of 2019.

Respondents predicted business expansion to continue yet fade in the fourth quarter of 2019, as indicated by a WNB of 9.13% supported mainly by the construction sector and most of the tertiary sector. Nevertheless, the respondents remained upbeat on future conditions, predicting higher investment and labour utilisation in the fourth quarter of 2019.

Comprehensive survey results are posted under the Business Survey on the official Bank Indonesia website.

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