BPS: Manufacturing slowdown triggered by coal and refinery contraction

Statistics Indonesia (BPS) has revealed that the slowdown in manufacturing growth in the second quarter of 2026 was mainly driven by contraction in the coal and oil and gas refining subsectors.

Manufacturing grew 4.52 percent year-on-year (yoy) in the second quarter of 2026, slowing from 5.68 percent yoy in the same period the previous year.

“Non-oil and gas is good. But the oil and gas industry, especially the oil and gas refining industry, grew negatively,” said M. Edy Mahmud, Deputy for Balance Sheet and Statistical Analysis at BPS, during a press conference in Jakarta on Wednesday.

Edy further explained that the coal and oil and gas refining industries contracted by 3.97 percent yoy in the second quarter of 2026 and by 0.15 percent cumulatively (ctc) in the first half of 2026.

According to him, the contraction in these two subsectors weighed on overall manufacturing growth, even though non-oil and gas manufacturing continued to perform well.

By contrast, non-oil and gas manufacturing grew 5.32 percent yoy in the second quarter of 2026, higher than in the first quarter of 2026, and grew 5.23 percent ctc in the first half of 2026.

Manufacturing was the largest source of growth for the Indonesian economy in the second quarter of 2026, contributing 0.90 percentage points. The sector also held the largest share of gross domestic product (GDP) at 18.50 percent.

BPS noted that manufacturing growth was supported by both domestic and external demand.

In more detail, the food and beverage industry grew 6.51 percent amid rising domestic and external demand, particularly for processed fish products, chicken meat, milk and dairy products.

In addition, the metal goods, computers, electronic goods, optics and electrical equipment industry grew 8.04 percent, driven by increased external demand for electronic components, batteries and electrical equipment.

Meanwhile, the chemicals, pharmaceuticals and traditional medicine industry grew 4.99 percent, supported by rising domestic and external demand for chemical products.

In the second quarter of 2026, GDP at constant prices (ADHK) was recorded at Rp3,576.2 trillion, up from Rp3,396.6 trillion in the second quarter of 2025, meaning the Indonesian economy grew 5.29 percent yoy.

From the production side, besides manufacturing, trade was the next largest source of economic growth with a contribution of 0.83 percentage points. The sector grew 6.39 percent yoy and held a 13.02 percent share of GDP.

The construction sector was the next source of economic growth, contributing 0.62 percentage points. The sector grew 6.68 percent yoy and held a 9.79 percent share of GDP.

The information and communication sector contributed 0.48 percentage points to economic growth. The sector grew 6.97 percent yoy with a 4.30 percent share of GDP.

From the expenditure side, the largest source of economic growth came from household consumption at 2.67 percentage points, with growth of 5.06 percent yoy and a contribution to GDP of 53.32 percent.

Gross fixed capital formation (PMTB) contributed 2.06 percentage points to economic growth, with growth of 6.87 percent yoy and a contribution to GDP of 29.36 percent.

Government consumption contributed 1.07 percentage points to economic growth, with growth of 15.97 percent yoy and a contribution to GDP of 7.57 percent.

Consumption by non-profit institutions serving households (LNPRT) grew 6.93 percent yoy with a contribution to GDP of 1.35 percent.

Exports grew 4.13 percent yoy with a contribution to GDP of 23.13 percent. Meanwhile, imports increased 8.82 percent yoy. Given that imports are a subtraction factor in GDP calculation, net exports recorded a negative contribution of 0.78 percentage points to economic growth.