Bank Indonesia Survey: Manufacturing Still Expanding in Q2

The results of Bank Indonesia’s business activity survey indicate that Indonesian manufacturing remained in an expansion phase in the second quarter of 2026, with the Bank Indonesia Prompt Manufacturing Index (PMI-BI) at 51.43 per cent. Nevertheless, the expansion slowed compared with the first quarter, which was recorded at 52.03 per cent.

“Based on its constituent components, the majority of components were in the 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 per cent, while finished goods inventory volume and total order volume stood at 53 per cent and 52.77 per cent respectively. BI noted that the performance of production volume was in line with sustained public demand, supported by consistently strong total orders, high finished goods inventories, and the availability of production facilities.

Meanwhile, the employment component recorded a decline in the second quarter of 2026, with an index of 48.65 per cent, lower than the previous period’s 48.76 per cent. For the following quarter, labour utilisation is expected to improve slightly, with an index of 49.70 per cent, though it would remain in contraction, below the 50 per cent expansion threshold.

By sub-sector, most were also in the expansion phase, with the highest index recorded in the machinery and equipment industry, followed by the food and beverage industry, basic metals industry, and non-metallic mineral products industry.

The BI survey projects that manufacturing business performance will improve in the third quarter of 2026, with an index of 52.32 per cent, remaining in expansion. The expansion will mainly be driven by production volume rising to 54.33 per cent, followed by finished goods inventory volume at 53.67 per cent and total order volume at 53.66 per cent.

The majority of sub-sectors are predicted to be in the expansion phase in the coming quarter, with the highest index in the machinery and equipment industry, followed by the tobacco processing industry, basic metals industry, and transport equipment industry.