Paper Sector Dominates as Indonesia's Processing Industry Records Expansion in Q1 2026

Bank Indonesia (BI) reports that the performance of the Processing Industry Business Field in the first quarter of 2026 has improved and is in an expansion phase, with the index position above 50 percent.

Director of the BI Communication Department, Anton Pitono, explained that this is reflected in the BI Purchasing Managers’ Index (PMI) for Q1 2026, which is higher at 52.03 percent compared to Q4 2025 at 51.86 percent.

“Based on its components, the BI PMI for Q1 2026 is driven by the expansion of finished goods inventory volume at 54.43 percent, production volume at 54.07 percent, and total order volume at 53.20 percent,” said Anton in his statement on Friday, 17 April 2026.

He added that, when viewed by sub-business fields (sub-LU), the BI PMI for most sub-LU is also in the expansion phase.

The highest index is in the paper industry and paper products, printing, and recording media reproduction, reaching 57.27 percent.

“Next is the leather industry, leather goods, and footwear at 55.83 percent, as well as the food and beverage industry at 55.33 percent,” he stated.

Meanwhile, for Q2 2026, Anton predicts that the performance of the processing industry business field will remain in the expansion phase and increase to 52.26 percent.

This is mainly driven by production volume, finished goods inventory volume, and total order volume.

“The majority of sub-LU are projected to be in the expansion phase, with the highest indices in the furniture industry, then the leather industry, leather goods and footwear, as well as the food and beverage industry,” he said.