Bank Indonesia Survey: Manufacturing Still Expanding in Q2

The results of Bank Indonesia’s business activity survey show that Indonesia’s manufacturing or processing industry remained in an expansion phase in the second quarter of 2026, with the BI Prompt Manufacturing Index (PMI-BI) at 51.43 percent. However, the expansion slowed compared to the first quarter, which recorded 52.03 percent. “Based on its constituent components, the majority of components are in an expansion phase, namely production volume, finished goods inventory volume, and total order volume,” according to a Bank Indonesia press release on Friday, 17 July 2026. Production volume in the second quarter of 2026 was recorded at 53.81 percent. Meanwhile, finished goods inventory volume and total order volume were 53 percent and 52.77 percent, respectively. BI noted that production volume performance was in line with maintained public demand, supported by strong total orders, high finished goods inventory, and the availability of production facilities. The performance of the labour component in the second quarter of 2026 recorded a decline with an index of 48.65 percent, lower than the previous period’s 48.76 percent. Meanwhile, in the following quarter, labour usage is forecast to improve with a slightly higher index value of 49.70 percent, though still in contraction or below the 50 percent expansion threshold. Based on sub-sectors, most are also in an expansion phase. The highest index was in the machinery and equipment industry, followed by the food and beverage industry, the basic metals industry, and the non-metallic mineral products industry. The BI survey estimates that the performance of the manufacturing sector will increase in the third quarter of 2026, with a projected index of 52.32 percent, remaining in the expansion phase. The expansion is mainly driven by production volume, which is forecast at 54.33 percent, followed by finished goods inventory volume at 53.67 percent and total order volume at 53.66 percent. The majority of sub-sectors are predicted to be in an expansion phase in the following quarter, with the highest index in the machinery and equipment industry, followed by the tobacco processing industry, the basic metals industry, and the transport equipment industry.