Manufacturing PMI rises, Kadin: Driven by increased production and demand

The Indonesian Chamber of Commerce and Industry (Kadin) assesses that the rise in Indonesia’s manufacturing Purchasing Managers’ Index (PMI) to 50.2 in July 2026 was driven by increased production and improving domestic demand.

Kadin Deputy Chairman for Industry Saleh Husin said the increase in the PMI to 50.2 indicates that national manufacturing activity has re-entered an expansion phase after contracting in June 2026 at 46.9.

"The improvement was mainly driven by increased production and improving domestic demand, so new orders increased again," he said in a statement in Jakarta on Monday.

According to him, consistency of expansion is needed in the coming months, along with support from other indicators such as increased industrial output, production capacity utilisation, and investment to ensure a sustainable recovery.

Saleh noted that compared to ASEAN countries, Indonesia’s manufacturing position has now improved. However, the pace of expansion is still relatively moderate compared to several countries that recorded higher growth.

Nevertheless, Saleh reminded that the industry still faces a number of challenges, ranging from rising raw material costs and weak export demand to cautiousness among business actors in purchasing raw materials.

Furthermore, he said the PMI reflects short-term business activity conditions, while investment decisions require consideration of demand prospects and certainty of economic sustainability.

"Business actors are expected to continue observing the sustainability of demand trends in the coming months before expanding capacity or making new investments," Saleh said.

Based on data from S&P Global, Indonesia’s manufacturing activity re-entered an expansion phase in July 2026, with the manufacturing PMI rising to 50.2 from 46.9 in the previous month.