Manufacturing Exits Contraction Zone, But Margin Threats Persist

Indonesia’s manufacturing sector has begun to recover. The S&P Global report showed Indonesia’s Manufacturing Purchasing Managers’ Index (PMI) rose to a level of 50 in May 2026, up from 49.1 in April. This increase ends the contraction phase and signals industrial activity has returned to the expansion zone. Bahana Sekuritas Investment Specialist Yazid Muamar assessed that the PMI’s movement from the contraction zone into expansion territory is an early positive signal for the prospects of the real sector and manufacturing. However, he noted this improvement may not necessarily be directly reflected in the financial performance of listed companies.