Jakarta, CNBC Indonesia - Coordinating Minister for the Economy\nAirlangga Hartarto has revealed that the weakening performance of\nIndonesia\u2019s manufacturing sector in April 2026 is due to global\nuncertainties. According to him, geopolitical conflicts between the US\nand Iran have caused disruptions to the global supply chain.<\/p>\n
\u201cManufacturing is declining because the future of this war remains\nuncertain. So, the supply chain is also worried that the next disruption\nwill be the supply chain,\u201d Airlangga said when met at the Coordinating\nMinistry for the Economy building on Monday (4\/5\/2026).<\/p>\n
As is known, data from the Purchasing Managers\u2019 Index (PMI) released\nby S&P Global today, Monday (4\/5\/2026), shows Indonesia\u2019s PMI at\n49.1 in April 2026. This figure is the lowest since July 2025 or the\npast nine months. This figure also marks the first PMI contraction since\nJuly 2025 after eight months of expansion.<\/p>\n
The PMI uses 50 as the starting point. If above 50, it means the\nbusiness world is in an expansion phase. Meanwhile, below that, it\nindicates contraction. Airlangga explained that the manufacturing sector\nis highly dependent on many other sectors as well as demand.<\/p>\n
\u201cBecause in terms of energy, it usually shifts to petrochemical\nproducts, plastics and others, plastic packaging, followed by logistics.\nAnd manufacturing is very dependent on logistics, and then related to\nthe demand side. So we are just monitoring this,\u201d he said.<\/p>\n
Previously reported, S&P explained that the PMI experienced\ncontraction due to a decline in Indonesia\u2019s manufacturing sector\nconditions in the early second quarter of 2026 due to several\nfactors.<\/p>\n
Companies recorded a fairly strong contraction in production volume.\nThis is the sharpest correction in nearly a year, although there was a\nslight increase in new orders.<\/p>\n
This contraction was driven by a sustained decline in production\nvolume. The decline occurred for two consecutive months, with the rate\nof decline accelerating compared to March and becoming the fastest since\nMay last year.<\/p>\n
Companies cited rising raw material prices, supply shortages, and\nweakening customer purchasing power as the main factors behind this\ndecline.<\/p>\n
On a more positive note, Indonesian producers reported a slight\nincrease in new orders, although this was largely due to earlier\nordering to anticipate future price increases and supply\ndisruptions.<\/p>\n
Data shows that this increase mainly came from the domestic market,\nwhile new export orders actually experienced a fairly significant\ndecline. Cost pressures increased during the month, with input cost\ninflation reaching the highest level in exactly four years.<\/p>\n
Businesses linked the rise in input costs to increasing raw material\nprices and material scarcity. Companies responded to this cost increase\nby raising selling prices in the early second quarter, with the rate of\nincrease being the largest since October 2013.<\/p>\n
Producers also slightly reduced purchasing activity in line with\nweakening production needs. Delivery delays and supply shortages led\ncompanies to use existing raw material stocks to maintain\nproduction.<\/p>\n
At the same time, finished goods stocks increased as producers held\nonto unsold items.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesias-manufacturing-performance-weakens-airlangga-reveals-the-root-causes-1777881200", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }