Indonesia Manufacturing Returns to Expansion

Indonesia’s S&P Global Manufacturing PMI rose to 52.6 in January 2026 from 51.2 in the previous month, marking a sixth straight month of expansion in factory activity. Output grew for a third month and at the second-fastest pace in nearly a year, while new orders extended their six-month streak, signaling resilient demand. Meanwhile, firms boosted input purchases for a sixth month, as they sought to build both pre- and post-production inventories. At the same time, supplier delivery times lengthened to the greatest extent in more than four years, weighed down by stronger input demand and adverse weather conditions. Capacity pressures intensified as backlogs rose for a third month, yet employment slipped marginally after six months of gains. On the cost front, input price inflation stayed marked but steady, below the long-run average, while output prices rose modestly at the slowest pace in three months. Finally, business confidence strengthened further, reaching a ten-month high.

Indonesia’s S&P Global Manufacturing PMI slipped to 51.2 in December 2025 from November’s nine-month high of 53.3, though still marking a fifth consecutive month of expansion in factory activity. Growth in new orders and employment slowed, while foreign sales fell for a fourth month. Capacity pressures persisted, driving a second straight rise in backlogs. Output rose again but was capped by raw material shortages. Buying activity increased moderately as firms sought to build pre-production inventories, while post-production stocks rose to the joint-largest level in six years. Delivery times lengthened for a third month, partly due to adverse weather. Input cost inflation remained sharp, though it eased to a four-month low, with higher raw material prices and supply shortages cited. Firms raised output charges again, but less than in November. Finally, confidence strengthened to its highest since September, supported by expectations of new product launches and stronger customer demand.

The S&P Global Indonesia Manufacturing PMI rose to 53.3 in November 2025 from 51.2 in October, marking the highest reading since February and the fourth straight month of factory activity expansion. New orders grew the most since August 2023, while output expanded for the first time in three months, posting its steepest rise since February. Employment rose for the fourth month, though the rate of hiring eased slightly. Backlogs of work gained for the first time in eight months, with the strongest accumulation in over four years, while input purchases rose at the fastest pace in eight months. Foreign orders, however, fell the most in 14 months. Delivery times lengthened further, the most pronounced delays since October 2021, amid road congestion and poor weather. Input costs hit their highest since February, due to raw material prices and currency fluctuations, prompting firms to raise factory gate prices at the fastest pace in 19 months. Lastly, sentiment slipped to a four-month low.