{
    "success": true,
    "data": {
        "id": 1716776,
        "msgid": "domestic-manufacturing-sector-pressured-by-cost-inflation-1777892030",
        "date": "2026-05-04 16:48:40",
        "title": "Domestic Manufacturing Sector Pressured by Cost Inflation",
        "author": "",
        "source": "TEMPO_ID_BISNIS",
        "tags": "",
        "topic": "Economy",
        "summary": "Latest S&P Global data reveals that Indonesia's manufacturing activity entered a contraction phase in April 2026, with the Purchasing Managers' Index (PMI) dropping to 49.1 from 50.1 in March, marking the first contraction in nine months amid intensifying global and domestic inflationary pressures. Economists attribute this downturn to surging input costs driven by geopolitical conflicts and supply chain disruptions, leading to cost-push inflation that forces producers to cut output or raise prices, potentially spilling over to consumer inflation in the coming months. This situation poses complex policy challenges for Indonesia, requiring precise monetary responses and exchange rate stabilisation, as similar trends affect other ASEAN nations like the Philippines and Vietnam.",
        "content": "<p>Latest S&amp;P Global data shows that Indonesia\u2019s manufacturing\nactivity entered a contraction phase in April 2026. The Purchasing\nManagers\u2019 Index (PMI) fell from 50.1 in March to 49.1. Head of Economics\nat Trimegah Sekuritas Indonesia, Fakhrul Fulvian, assesses that this\ndecline marks the first contraction in the last nine months and occurs\namid strengthening inflationary pressures, both globally and\ndomestically. According to him, this weakening is not isolated but part\nof a broader global phenomenon. \u201cWe see a very clear divergence between\nadvanced economies and ASEAN countries,\u201d Fakhrul stated in a written\ncomment on Monday, 4 May 2026. Fakhrul views that the United States and\nJapan are instead experiencing manufacturing acceleration due to the\nsafety stock building phenomenon. Meanwhile, ASEAN countries, including\nIndonesia, are starting to feel pressure from cost inflation and supply\nchain disruptions. He explains that the pressure on Indonesia\u2019s\nmanufacturing sector is triggered by a surge in input costs. This is due\nto geopolitical conflicts driving up raw material prices and supply\nlimitations. This condition is reflected in production cost inflation\nsurging to the highest level in the last four years and then passed on\nto selling prices at the fastest rate in more than a decade. Fakhrul\ndescribes this situation as an example of cost-push inflation, where\nrising costs force producers to reduce output or increase selling\nprices. According to him, both occurred simultaneously in April. On the\nother hand, he assesses that the increase in new orders does not yet\nreflect a healthy demand recovery. The rise in orders is considered more\nof a front-loading nature in anticipation of price increases, rather\nthan due to genuinely strong demand. Fakhrul also highlights the PMI\nweakening occurring alongside Indonesia\u2019s inflation of 2.42 per cent\nyear-on-year in April 2026. Although still within the target range, the\ndynamics in the manufacturing sector are seen to indicate potential\nfuture price pressures starting to emerge from the input side. He\nassesses that pressure at the producer level has the potential to spill\nover to consumer inflation in the coming months, especially considering\nthe weakening of the rupiah exchange rate. Fakhrul emphasises that this\ncondition creates non-simple policy challenges because the real sector\nis weakening while price pressures are increasing. According to him, the\nsituation demands more precise policy responses, particularly from the\nmonetary side and exchange rate stabilisation. In the regional context,\nhe assesses that Indonesia is not alone. The Philippines has also\nentered the contraction zone, while Vietnam and Thailand are\nexperiencing significant slowdowns. Meanwhile, Malaysia is considered\nrelatively better due to stockpile building activities.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/domestic-manufacturing-sector-pressured-by-cost-inflation-1777892030",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
}