Rise in Indonesia's manufacturing PMI reflects resilience: Ministry

 The Ministry of Industry stated that the improvement in Indonesia's manufacturing Purchasing Managers’ Index (PMI) in May 2026 is evidence of the national industry's resilience amid global challenges.

S&P Global data shows Indonesia's manufacturing PMI stood at 50.0 in May, up from 49.1 in contractionary territory in April.

In a statement on Tuesday, Industry Minister Agus Gumiwang Kartasasmita said the PMI improvement reflects the industrial sector's resilience in maintaining production continuity amid global economic dynamics.

"Industry players are taking preemptive measures by strengthening raw material inventories to ensure production remains uninterrupted over the coming months," he said.

According to him, the PMI uptick in May needs to be viewed comprehensively. A key driver behind the index's improvement was manufacturers increasing their stockpiles to mitigate potential supply disruptions and rising costs of imported raw materials.

"Raw materials and intermediate goods currently account for about 70 percent of Indonesia's imports, capital goods like machinery and equipment make up around 15 percent, while the remainder consists of consumer goods," he said.

He further explained that while manufacturers previously maintained an average of three months' worth of raw material inventory, many companies have now doubled their reserves to sustain operations for the next six months.

This move is deemed vital, particularly for sectors that rely on continuous manufacturing.

In addition to maintaining production, increasing raw material stocks also serves as a strategic hedge against future price increases.

The minister noted that manufacturers cannot immediately raise their selling prices because the market takes time to adapt.

The Ministry of Industry recorded that the manufacturing PMI achievement in May also aligned with the positive performance in the Industrial Confidence Index (IKI), which climbed to 53.56 from 51.75 in April.

This rise reflects growing optimism among manufacturers regarding business conditions and steadily improving domestic demand.

"The rise in both the PMI and IKI in May signals that the domestic manufacturing sector remains highly resilient. Industries are maintaining their production levels while proactively hedging against risks from external factors," he asserted.

Based on the S&P Global report, the rise in Indonesia's manufacturing PMI in May was also fueled by an acceleration in new orders, driven primarily by the domestic market.

However, production cost pressures and raw material supply disruptions remain key challenges for the manufacturing sector.

The Ministry of Industry affirmed that it will continue to strengthen coordination with industry players to ensure a steady supply of raw materials, maintain domestic production continuity, and boost the competitiveness of Indonesian manufacturing amid a volatile global economy.