BPS: Indonesia's Manufacturing Sector Remains in Expansion Zone Amid Global Dynamics

JAKARTA — Statistics Indonesia (BPS) Head Amalia Adininggar Widyasanti said Indonesia’s manufacturing sector remains in the expansion zone in the first quarter of 2026 amid global economic and geopolitical challenges. ‘The Manufacturing Business Confidence Index is in the expansion zone this quarter,’ she said in Jakarta on Tuesday.

BPS recorded a 5.04% year-on-year growth in the processing industry in Q1 2026, contributing significantly to national economic growth. According to Amalia, this growth was supported by increased production activity in several manufacturing subsectors linked to investment and domestic demand.

Notably, the computer, electronic, and optical equipment industry grew 10.35%, while non-metallic mineral products industry expanded 9.12%. Amalia noted these subsectors’ growth aligns with rising demand for capital goods to support production and business expansion. ‘Capital goods imports grew by 14.27%,’ she added.

BPS also reported the Manufacturing Business Confidence Index (IKBM) at 51.37 in Q1 2026, still in the expansion zone. The index, compiled from approximately 8,561 manufacturing firms, provides a comprehensive view of industry conditions.

However, Amalia acknowledged not all manufacturing subsectors experienced positive growth. The delivery time component of the IKBM remains in contraction due to slower shipments during Ramadan and Eid al-Fitr. Some pressured subsectors include transport equipment, which contracted 5.4%, and tobacco processing, which saw negative growth of 2.8% in Q1 2026.

Amalia stated that this indicates an uneven recovery across manufacturing subsectors, requiring detailed analysis. Nevertheless, she believes the national manufacturing sector remains resilient, sustained by domestic demand and investment activity. She emphasised the need for granular data to direct real-sector strengthening policies towards both growing and struggling subsectors.