More Entrepreneurs Feel Their Businesses Are Declining, Starting to Lose Optimism
Jakarta, CNBC Indonesia - Business activity in March 2026 showed signals of slowdown. Several industry players began to feel a decline in performance after previously being boosted by early-year demand momentum.
Spokesperson for the Ministry of Industry (Kemenperin) Febri Hendri Antoni Arief revealed that this condition is reflected in the shifting perceptions of business actors. In his notes, the general business activity conditions in March 2026 declined compared to the previous month, with 73.7% of industries stating that their business activities improved and stabilised.
“The proportion of industries stating that their business conditions improved in March 2026 was 30.2%, down 3.1% from the previous month. Meanwhile, the percentage of industries answering that their business conditions were stable was 43.5%,” he said in the release of the Industrial Confidence Index (IKI) at the Ministry of Industry on Tuesday (31/3/2026).
“The percentage of business actors stating that their business conditions declined in March 2026 rose by 3.9% to 26.3%,” Febri added.
Pressure is also reflected in business actors’ future expectations. Optimism remains dominant but is starting to show signs of slowing compared to previous periods.
“The level of optimism among business actors regarding their business conditions over the next six months declined compared to recent months, at 71.8%. This figure slowed by 1.7% compared to the previous month’s percentage. 21.4% of business actors stated that their business conditions were stable, down 1.2% from the previous month’s percentage. The pessimism percentage rose by 2.9% to 6.8%,” he said.
On the production side, industries are also beginning to adjust output after the surge at the start of the year. This decline is evident from the movement of the Industrial Confidence Index (IKI), which weakened to 51.86, slowing by 2.16 points compared to the IKI for February 2026 of 54.02.
“The drop in IKI by 2.16 points compared to February 2026 IKI is caused by a combination of various factors, particularly seasonal factors with the passing of religious holidays, Eid al-Fitr and Chinese New Year, so industries slightly reduced their production,” he explained.
In addition to seasonal factors, distribution obstacles also slowed the circulation of goods in the market. Logistics restrictions during the long holiday period caused stocks to be held up in warehouses.
“Some industries reduced their production in March compared to February because there were still many goods in stock in warehouses and not yet distributed to distributors or the market due to vehicle logistics restrictions for 16 days before and after Eid al-Fitr,” he said.
Some business actors had even anticipated this condition since the beginning of the year by increasing production first, before eventually holding back output in March.
“There were some industries that indeed surged their production in January and February 2026, so in March they reduced their production and continued to maintain their goods stock in warehouses until after Eid al-Fitr,” he said.
Amid these conditions, global dynamics also added pressure, although not yet evenly affecting all industrial sectors.
“Regarding the energy logistics crisis in the Middle East, to date the impact on industry is still limited to certain sub-sectors, particularly those using chemical or petrochemical raw materials,” Febri revealed.
Softening domestic demand further emphasises the slowdown in industrial activity during this period.
“And there are several other factors causing industries to slightly reduce their production, namely related to the decline in domestic demand in March 2026,” Febri stated.