RRI.CO.ID, Jakarta – Indonesia’s manufacturing sector is regaining strength, buoyed by government policy support and easing input costs, as the country’s Purchasing Managers’ Index (PMI) returned to expansion in July 2026.

According to S&P Global, the Manufacturing PMI climbed to 50.2 in July, up sharply from 46.9 in June. The rebound signals renewed operational recovery, driven by rising production output for the first time since February, stabilizing new orders, and job growth after four months of decline.

Ministry of Industry spokesperson Febri Hendri Antoni Arif said the improvement reflects stronger business confidence and resilience amid volatile raw material costs and global uncertainty.

“The 3.3‑point increase confirms that industrial production is gaining momentum. Rising output and new employment show consumer confidence and domestic demand are improving,” he noted, as quoted on the ministry's official website.

S&P Global’s survey also highlighted business optimism reaching its highest level in six months, alongside slower increases in raw material prices.

Febri pointed to two key government measures underpinning the recovery: the special natural gas prices (HGBT) policy, which secures affordable energy for sectors such as fertilizers, petrochemicals, ceramics, steel, and oleochemicals; and the Finance Ministry’s tariff relaxation on plastic raw materials, which eases import costs for packaging, food and beverage, automotive, and electronics industries.

“These steps directly reduce input cost inflation, which has slowed to its lowest pace in four months, while boosting industry confidence,” Febri said.

While the macro indicators show solid recovery, the ministry urged vigilance against global supply chain risks and currency fluctuations.

Indonesia’s July PMI places it in line with regional peers, surpassing Myanmar (49.3) and matching Malaysia (50.2), while trailing the Philippines (51.8), Vietnam (52.9), China (50.9), and Australia (52.0). ***