Indonesia’s manufacturing sector showed stronger business confidence in the second quarter of 2026, with production, new orders, and inventory levels all remaining in expansion territory, according to the latest data released by Statistics Indonesia (BPS).
The agency reported that the Manufacturing Business Conditions and Outlook Index (IKBM) rose to 52.31 in the second quarter, up from 51.37 recorded in the first quarter of the year. An index reading above 50 indicates expansion, reflecting improving business conditions and positive industry expectations.
BPS Deputy for National Accounts and Statistical Analysis Edy Mahmud said the higher index demonstrates that Indonesia’s manufacturing industry continued to strengthen during the April–June period. Growth was primarily supported by increased production activity, stronger demand, and higher inventory levels across the sector.
Among the index components, new orders recorded one of the strongest improvements, climbing from 52.69 in the first quarter to 53.78 in the second quarter. The increase suggests manufacturers received more customer orders, signaling healthier market demand.
Production activity also accelerated, with the production component rising from 51.78 to 54.21, while the inventory index edged up from 51.54 to 51.86. The expansion in these indicators points to greater manufacturing output and improved business confidence.
Despite the overall positive trend, BPS noted that not every component showed growth. The employment index remained slightly below the expansion threshold at 49.92, indicating hiring activity had yet to fully recover. Meanwhile, the delivery time index stood at 49.71, suggesting continued logistical or operational challenges in parts of the manufacturing supply chain.
The latest BPS findings are broadly in line with earlier data released by the Ministry of Industry, which also reported stronger manufacturing performance in July 2026.
The ministry’s Industrial Confidence Index (IKI) increased to 53.10 in July, up from 52.90 in June, reflecting improving business sentiment after manufacturers previously faced pressure from weaker production and demand.
The combined indicators suggest that Indonesia’s manufacturing sector is gradually regaining momentum, although challenges related to employment and supply chain efficiency remain areas requiring continued attention.
Fajar Santoso is a lifestyle and travel writer at RakyatPost who focuses on culture, tourism, modern living, and destination storytelling across Asia and beyond. With a passion for discovering unique experiences and local traditions, he creates engaging content that inspires readers to explore new places, lifestyles, and perspectives. His writing blends informative journalism with creative storytelling to deliver meaningful and reader-friendly travel and lifestyle coverage.
