Indonesia sales growth slows

Indonesian cement sales during the month of May rose at their slowest pace for 17 months as all regions outside Java and Sulawesi registered declines.

Following an 8.6 per cent rise in April, nationwide sales during May increased by 2.1 per cent to 4.7Mt, latest data from the country’s leading cement producer Semen Indonesia shows.

Sales in Java, which accounts for 55 per cent of the local market, rose by 5.3 per cent to 2.8Mt. On the island of Sulawesi dispatches also increased 12 per cent to 353,476t. However, declines were registered in all other regions with Maluku and Papua posting the biggest drop, consuming just 107,092t, down 9.6 per cent from last year. Meanwhiile, Sumatra only consumed 1.02Mt of cement, a contraction of three per cent from last year.

During the January-May 2013 period, total sales rose 6.9 per cent YoY to 23Mt. Dispatches by Semen Indonesia rose 18.3 per cent during the five-month period to 10.1Mt, the company said.

Analysts warn that the May slowdown could signal a broader economic slowdown. The central bank has recently said it expects a slowing in exports and investment, especially in non-construction investment. However, it expects household spending and construction projects to remain buoyant, supporting cement demand.