S&P Report Shows Indonesia's Manufacturing Expansion Strengthens

Global ratings agency Standard & Poor’s Global Ratings (S&P) reported that Indonesia’s manufacturing Purchasing Manager’s Index (PMI) remained in expansion territory in February. Indonesia’s manufacturing PMI score for February 2026 stood at 53.8.

The manufacturing PMI improved compared to January. “S&P Global’s Headline Manufacturing PMI for Indonesia rose from 52.6 in January to 53.8 in February, indicating stronger improvement in the health of the goods production sector,” stated in an S&P Global press release on Monday, 2 March 2026.

The PMI expansion threshold for manufacturing is 50; below that level is classified as contraction. The primary factor driving the February increase was accelerating growth in demand for Indonesian manufactured products. S&P noted that this score indicated an expansion in manufacturing operating conditions representing the largest expansion since March 2024.

New orders rose for seven consecutive months, with growth at its strongest position since November. Positive sales figures prompted companies to increase employment six times in seven months at the highest level since November. This increase in workforce was considered instrumental in helping Indonesian manufacturing boost production in February.

Additionally, there was a reported rise in input purchases for seven consecutive months, representing the sharpest increase in less than two years. At the same time, inventories increased as several companies added input stocks to respond to rising demand and production requirements.

S&P Global Market Intelligence economist Usamah Bhatti stated that improvement was strengthening in mid-first quarter, providing positive prospects for the coming months. However, price pressures remained elevated. Producers noted increased cost burdens amid reports of rising raw material prices.