Industrial Confidence Index at 54.12, Highest Level in Over Three Years

RRI.CO.ID, Jakarta: The Indonesian Ministry of Industry has recorded a positive trend in the national manufacturing sector's performance. The Industrial Confidence Index (IKI) in January 2026 was 54.12, up 2.22 points from December 2025.

The Ministry's spokesperson, Febri Hendri Antoni Arief, said this was the highest achievement since the IKI was launched in November 2022. “This achievement is also 1.02 points higher than January 2025, which indicates strengthening confidence among industry players in business prospects at the start of the year,” said Febri Hendri Antoni Arief in his statement in Jakarta, as quoted by the Ministry's official website on January 30, 2026.

In terms of macroeconomic policy, stability was supported by Bank Indonesia's (BI) decision to maintain the BI Rate at 4.75 percent. This step is consistent with efforts to keep the rupiah exchange rate and the 2026-2027 inflation target of 2.5 percent ±1 percent.

Inflation in December 2025 was recorded at 2.92 percent year-on-year (yoy) and 0.64 percent month-to-month (mtm). Year-end seasonal factors and supply disruptions primarily influenced this increase.

Manufacturing activity remained in expansion, with Indonesia’s S&P Global Manufacturing PMI standing at 51.2 in December 2025. The BI Manufacturing Index (PMI-BI) in the fourth quarter of 2025 (Q4-2025) also increased to 51.86 percent and is projected to strengthen in Q1-2026.

Febri said that the IKI structure in January 2026 showed a balanced improvement. Of the 23 manufacturing subsectors, 20 are in expansion, and only three subsectors are still in contraction.

The subsectors in the expansion phase accounted for 94.7 percent of the Non-Oil and Gas Manufacturing Industry's Gross Domestic Product (GDP). The three subsectors with the highest IKI values are the Motor Vehicle, Trailer, and Semi-Trailer Industry, and the Machinery and Equipment Industry.

Febri explained that the increase in production is in response to the surge in demand ahead of Ramadan and Eid al-Fitr. He added that the industry's positive response is also influenced by ongoing policy communication between the Minister of Industry and the Ministry of Finance, which is still under discussion.

All IKI components were in the expansion zone, supported by a surge in the production index to 54.86 (6.45 points) and the orders index to 55.27 (2.51 points). Meanwhile, the inventory index stood at 50.14, down from the previous month.

“The return of the production variable to the expansion zone is due to the industry intensively producing goods to meet the increased demand for religious holidays in February and March 2026,” Febri said.

The IKI survey shows that business activity remains relatively strong and stable (78.5 percent of respondents reported improvement/stability), up from December 2025. Industry optimism rose to 72.5 percent, while pessimism fell to 4.5 percent.

The export-oriented IKI for January 2026 was recorded at 54.62 (up 2.26 points). The domestic IKI also increased and continued to expand. This indicates that domestic demand is the primary driver of industrial performance amid global market challenges.

The strengthening of the IKI was also supported by increased investment in the manufacturing sector in Q4-2025, which reached IDR 218.2 trillion (43.9 percent of total national investment). The 17.27 percent (yoy) increase in capital goods imports in November 2025 indicates capacity expansion and machinery renewal in the industrial sector.

The Ministry will continue to implement strategic policies to strengthen the domestic market, enhance export competitiveness, deepen the industrial structure, and accelerate the green and digital industrial transformation. “The IKI achievement in January 2026 will be a strong foundation for the national industry to grow sustainably throughout 2026,” concluded Febri. ***