BI: Manufacturing PMI in Q1 Rises to 52.03 Percent

Indonesia's manufacturing sector shows resilience, with Bank Indonesia's (BI) latest PMI data for the first quarter of 2026 indicating a positive expansionary phase, as reported by Tempo (ID).

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Based on its constituent components, finished goods inventory, production volume, and total order volume were recorded in the expansion phase.

The PROMPT Manufacturing Index reached 52.03 percent, a slight increase from the previous quarter, signaling robust activity. This growth is underpinned by healthy increases in production volume and finished goods inventory, suggesting manufacturers are meeting demand and managing stock effectively. The overall volume of total orders also remained in expansionary territory, albeit with a marginal decrease.

However, the data also points to areas of concern. The decline in the labor index and the contraction in the speed of receiving input goods suggest potential bottlenecks or adjustments in workforce and supply chain management. These factors warrant close monitoring as the sector navigates global economic shifts.

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In Q2 2026, the performance of the processing industry is expected to remain in the expansion phase and increase to 52.26 percent. Expansion is mainly driven by production volume, finished goods inventory volume, and total order volume.

While BI remains optimistic about continued expansion in the second quarter, the report also references a contrasting view from Standard & Poor's Global Ratings, which noted a recent dip in Indonesia's PMI. S&P attributed this to rising raw material costs, exacerbated by the conflict in the Middle East. This highlights the delicate balance manufacturers must strike, managing domestic growth drivers against external geopolitical and economic pressures. From an Indonesian perspective, maintaining stable domestic demand and supply chains is crucial for sustained industrial growth, especially amidst global uncertainties.

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According to reports from panel members, one of the main factors behind the decline at the end of the first quarter was the outbreak of war in the Middle East.