Jakarta \u2014 Indonesia\u2019s manufacturing activity surged in February 2026,\ncoinciding with the onset of Ramadan and the approach of Eid al-Fitr,\nwhen consumer demand traditionally peaks as households increase spending\non celebrations and consumption.<\/p>\n
The Purchasing Managers\u2019 Index (PMI), released today by S&P\nGlobal on Monday 2 March 2026, showed Indonesia\u2019s manufacturing sector\nat 53.8 in February\u2014the highest level since March 2024, spanning nearly\ntwo years. This marks the seventh consecutive month of expansion, with\nthe PMI remaining above the 50-point threshold that distinguishes\nexpansion from contraction.<\/p>\n
The February improvement was primarily driven by an accelerated\nexpansion in demand for Indonesian products. New orders expanded for the\nseventh consecutive month, with growth at the strongest pace since\nNovember 2025. Survey respondents reported increased customer numbers\nand improved client confidence. Notably, the expansion in new orders was\nbroad-based, with Indonesian manufacturers recording renewed growth in\nnew export orders\u2014the first increase in six months. This rise in export\norders was the sharpest since May 2022, reflecting improving demand\nconditions in international markets.<\/p>\n
According to Usamah Bhatti, economist at S&P Global Market\nIntelligence, the strengthening of Indonesia\u2019s manufacturing sector\nhealth in mid-first quarter represents a positive signal for the months\nahead. Demand conditions remained positive, with solid sales growth\ndriving increases in production, employment, and purchasing activity.\n\u201cIn addition, demand growth is not limited to the domestic market, as\nexports increased for the first time in six months,\u201d he noted.<\/p>\n
On the pricing front, Indonesian manufacturers reported a slight\nsoftening in input price inflation. Average cost burdens increased at\nthe slowest pace in six months, below long-term averages. In response,\ncompanies raised selling prices only moderately.<\/p>\n
Employment and Production Growth<\/p>\n
Positive sales momentum prompted companies to expand their workforce\nfor the sixth time in seven months, at the most pronounced rate since\nNovember. This employment growth supported increased production in\nFebruary, with output expanding at its fastest pace since April 2024.\nCompanies attributed production increases to rising new orders and to\nbuilding inventory stocks in preparation for potential future demand\nsurges.<\/p>\n
Consequently, finished goods inventory expanded for the fourth\nconsecutive month. However, firms managed to contain the build-up of\ndelayed work, as February backlogs remained relatively unchanged\ncompared to the previous survey period.<\/p>\n
Latest data revealed accelerated growth in purchasing activity among\ngoods producers. Input purchases expanded for the seventh consecutive\nmonth at the sharpest pace in nearly two years. Simultaneously,\npre-production inventory also increased, as some companies stockpiled\ninputs in response to improving demand and production requirements.<\/p>\n
February data also revealed supply-side pressures amid reports of\ndelivery delays and flooding impacts. Consequently, average supplier\ndelivery times lengthened for the fifth consecutive month.<\/p>\n
Looking ahead, confidence regarding prospects for the next 12 months\nedged down compared to January and remained below historical averages.\nNevertheless, the latest Future Output Index still demonstrated robust\noptimism for the year ahead, supported by expectations of stronger\ndemand conditions and more stable pricing.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/indonesias-manufacturing-pmi-reaches-highest-level-in-nearly-two-years-ahead-of-eid-1772416655", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }