Indonesia's Manufacturing PMI Returns to Expansion in September

RRI.CO.ID, Jakarta - Indonesia's manufacturing sector returned to expansion in September 2026, supported by stronger orders, rising production and improving export demand, signaling renewed momentum in economic activity toward the end of the year.

Indonesia's Manufacturing Purchasing Managers' Index (PMI) rose to 52.4 in September from 49.8 in August, returning the sector to expansion territory. The improvement was driven by increases in new orders, production, export orders, new project inflows and stronger purchasing power.

Coordinating Ministry for Economic Affairs spokesperson Haryo Limanseto said the government views the improvement as a positive sign that economic activity is regaining momentum.

"With stability firmly maintained and economic activity regaining strength, we want to ensure this momentum continues and brings broader benefits to the public," Haryo said in a statement quoted on the ministry's official website.

New orders grew at their fastest pace since February 2026, while export orders recorded their strongest growth since May 2022, opening room for higher industrial capacity utilization.

Production activity was accompanied by increases in employment, purchasing activity and input inventories. At the same time, input and output price inflation slowed to their lowest level in six months, indicating easing cost pressures for manufacturers.

The strengthening of manufacturing activity was also reflected in imports of capital goods and production inputs. From January to August, imports of raw and auxiliary materials reached USD 133.38 billion, while capital goods imports totaled USD 36.74 billion, together accounting for 91.3 percent of overall imports.

Imports of mechanical machinery and equipment rose 15.26 percent, while imports of electrical machinery and equipment increased 22.94 percent, indicating stronger demand for production equipment as manufacturing activity gains momentum.

On the export side, manufacturing exports grew 6.62 percent. Iron and steel exports reached USD 19.18 billion, crude palm oil (CPO) and its derivatives totaled USD 17.75 billion, and coal exports reached USD 16.58 billion, contributing to Indonesia's cumulative trade surplus of USD 7.25 billion from January to August 2026.

Despite the positive trend, food prices remain a challenge to maintaining purchasing power. September inflation stood at 3.28 percent year-on-year (yoy), while Volatile Food inflation reached 5.03 percent (yoy), driven by demand dynamics, lower horticultural production, extreme weather, El Niño, and natural disasters. ***