Manufacturing Sector Expands but Employment Component Contracts in Q2 2026

The Central Statistics Agency (BPS) has released the results of the Manufacturing Business Condition and Prospect Index (IKBM) for the second quarter of 2026, which registered above the 50 level, indicating an expansionary phase. Although the sector expanded overall, the employment component recorded a contraction in Q2 2026.

“In the second quarter of 2026, the IKBM was recorded at 52.31, showing that the manufacturing industry sector is in an expansionary phase and strengthened compared to the previous quarter’s 51.37,” said M Edy Mahmud, Deputy for Balance Sheet and Statistical Analysis at BPS, during a press conference at the BPS building in Jakarta on Wednesday (6/8/2026).

Edy explained that, by component, production, orders, and raw material inventories experienced expansion. Meanwhile, the employment and delivery time components contracted in Q2 2026. These five components are the main elements of the IKBM compiled by BPS. The IKBM was developed to provide an overview of economic activity according to business actors in the processing industry sector, with data sourced from the Quarterly Large and Medium Industry Survey.

“The employment component experienced a change, a decline, in Q2 2026, having previously expanded in Q1 2026,” he stated. BPS recorded the employment component in the IKBM for Q2 2026 below the 50 level, precisely at 49.92. This figure decreased compared to the Q1 2026 position of 50.57. A value above 50 indicates an expansionary zone, while below 50 indicates a contractionary zone.