Video: Manufacturing Sector Performance Under Pressure, Entrepreneurs Reveal the Causes

The performance of Indonesia’s manufacturing industry contracted again in August 2026, following the release of S&P Global data showing the Indonesian Manufacturing Purchasing Managers’ Index (PMI) fell to 49.8, down from 50.2 in July.

The Chairperson of the Jakarta Chamber of Commerce and Industry (Kadin DKI Jakarta), Diana Dewi, noted that this manufacturing contraction is occurring in specific sectors, such as the motor vehicle, metal, pharmaceutical, and cosmetics industries. Conversely, other sectors, such as food and beverages, are actually experiencing growth.

This indicates that several sectors do not yet see a need to reduce stock or production, as the challenges of the first half of 2026 are still manageable. Consequently, Kadin remains optimistic that industries will rebound and expand during the second half of 2026.

Currently, industrial challenges include rising production costs that cannot yet be passed on to consumer selling prices. Additionally, the influence of government policies means that sectors not deemed a government priority are experiencing pressure; if businesses face a decline in purchasing power, the potential for layoffs remains an open possibility.