Indonesia's Manufacturing Sector Expands in Q2 2026, BPS Provides Evidence

The Central Statistics Agency (BPS) reported that Indonesia’s manufacturing sector remained in fairly good condition and continued to show an expansionary phase in the second quarter of 2026.

Deputy for Balance Sheets and Statistical Analysis at BPS, M. Edy Mahmud, explained that based on the Manufacturing Business Conditions and Prospects Index (IKBM) data, the index for the second quarter of 2026 reached 52.31, up from 51.37 in the first quarter of 2026.

“The IKBM in the second quarter of 2026 reached 52.31, indicating that the manufacturing sector is in an expansion phase and strengthening compared to the previous quarter,” Edy said during a BPS release on Wednesday (5/8/2026).

The IKBM is compiled based on a quarterly survey of large and medium industries (IBS) covering large and medium-scale processing industries within industrial estates, special economic zones, and outside these areas.

Edy detailed that the production component was the main driver of the strengthening, with an index of 54.21 in the second quarter of 2026, up from 51.78 in the first quarter.

BPS also recorded an increase in the orders component to 53.78 in the second quarter of 2026, from 52.69 in the previous quarter. Meanwhile, the stock component rose to 51.86, from 51.54 previously.

However, the employment component was recorded as falling to 49.92 in the second quarter of 2026, from 50.57 in the first quarter, thus returning to the contraction zone.

Meanwhile, the delivery time component also remained below the expansion level with an index of 49.71, although it improved compared to 49.01 in the previous quarter.

For context, the employment component is measured by the average number of workers, while delivery time is determined by the delivery time of raw materials from suppliers.

“By component, the production, orders, and stock components experienced expansion. Meanwhile, the employment and delivery time components experienced contraction in the second quarter of 2026,” Edy explained.

According to him, the overall survey results indicate that the country’s manufacturing industry activity continued to develop in the second quarter of 2026.

“So overall, the IKBM in the second quarter of 2026 was 52.31, which shows it remains in the expansion zone,” Edy stated.