Indonesia Manufacturing PMI Falls Back Into Contraction

Indonesia's S&P Global Manufacturing PMI slipped to 49.8 in August 2026 from July's five-month high of 50.2, signalling a mild deterioration in factory activity. Output and employment fell in five of the past six surveys, with the latest decline in output tied to stronger competition and higher goods prices. Demand conditions were broadly neutral, while backlogs rose for a second month, though at a slower pace. Purchasing activity stabilised after five months of contraction. Supplier delivery times lengthened slightly, with delays only marginally worse than July. On the cost side, price pressures continued to ease, yet input costs and output charges remained historically elevated, reflecting higher raw material and supplier prices often passed on to customers. Finally, business confidence strengthened to a seven-month high, supported by expectations of firmer demand and stable market conditions that could underpin higher production over the next year.

Indonesia's S&P Global Manufacturing PMI rose to 50.2 in July 2026 from 46.9 in June, marking its highest reading since February. Output rose after four months of decline, though growth was marginal, while new orders steadied following June’s sharp drop. Meanwhile, export sales remained weak, falling for a fifth month. Rising workloads drove the strongest backlog buildup since November 2025, prompting firms to add staff for the first time in five months, albeit modestly. Purchasing activity slipped again, though only fractionally. Delivery times lengthened for a tenth month due to shipping delays, but the deterioration was the mildest in the current sequence as material availability improved. Input cost inflation eased to a four-month low yet stayed elevated on pricier raw materials, leading to another sharp rise in selling prices. Finally, sentiment hit its highest since January, supported by expectations of firmer sales, improving customer sentiment, and softer cost pressures.

Indonesia’s S&P Global Manufacturing PMI fell sharply to 46.9 in June 2026 from 50.0 in May, marking the lowest reading since June 2025 and signaling the sector's second contraction this year. New orders dropped for the first time in three months, at the sharpest pace in a year, underscoring softer purchasing power amid rising prices. Export sales also tumbled, marking their steepest decline since August 2021. Meanwhile, output shrank for a fourth straight month, the fastest since April 2025. Firms cut input purchases and jobs at the quickest rates in nearly five years. Backlogs eased again, and supplier delivery times lengthened for a ninth month, though delays were milder. On the cost side, inflationary pressures intensified: input costs surged to the second-highest level since the survey began in 2011, prompting the fastest rise in selling prices since 2013. Despite the downturn, sentiment brightened to a three-month high, with firms hopeful that cost pressures will gradually ease.