Minister of Industry Grateful for Indonesia's Manufacturing Performance to Survive

JAKARTA - The Ministry of Industry (Kemenperin) responded to a report by S&P Global which showed Indonesia's manufacturing Purchasing Managers' Index (PMI) fell sharply to 50.1 in March 2026 from 53.8 in February, although it was still at the expansion level.

Minister of Industry (Menperin) Agus Gumiwang Kartasasmita assessed that the national manufacturing sector still shows its resilience amid uncertainty in global conditions, such as geopolitical conflicts, supply chain disruptions, and rising prices of raw materials.

"We are surprised and grateful that in the midst of super-heavy conditions, both globally and domestically, the average Indonesian manufacturing PMI is still above 50. This shows the strong resilience of the country's manufacturing sector," said Agus in a written statement, Wednesday, April 1.

According to Agus, the performance of the manufacturing sector remains in the expansion phase, apart from the strength of the national industrial structure supported by relatively stable domestic demand.

"The fundamentals of our industry are still strong. Domestic demand remains the main support, so it is able to withstand considerable external pressure," he said.

Globally, the PMI survey also showed that inflationary pressures were increasing and supply chains were disrupted due to geopolitical conflicts, especially in the Middle East, which had an impact on rising energy and raw material costs.

In the ASEAN region, Indonesia remains in the group of countries with an expansive PMI along with several countries, such as Thailand at 54.1, Malaysia recorded 50.7, Myanmar recorded 51.5 and the Philippines recorded 51.3.

"If we look globally, almost all countries are experiencing the same pressure, both in terms of costs and supply chains. In this case, Indonesia is still able to survive in the expansion zone, this is certainly an achievement that should be appreciated," said Agus.

In March 2026, S&P Global's report showed a decline in output and new orders, as well as disruptions in raw material supply and rising raw material prices. In addition, the delivery time of raw materials has experienced the sharpest delay since October 2021.

This is exacerbated by the fact that cost pressures have also increased significantly, reflected in the inflation of raw material prices reaching the highest level in the last two years. "This condition encourages manufacturers to adjust selling prices to maintain business sustainability," he explained.

However, industry players still show optimism about future prospects. Based on the survey of the industrial confidence index (IKI) conducted by the Ministry of Industry, as many as 73.7 percent of respondents said that their business activities were improving and stable, with the level of optimism of business actors regarding their business conditions in the next 6 months at 71.8 percent.

Meanwhile, said Agus, his party will continue to implement various strategic steps to maintain the resilience of the manufacturing sector, including strengthening the industrial structure, increasing the utilization of production capacity, and optimizing the domestic market as the main support for growth.

In addition, the government is also focusing on maintaining the smooth supply of raw materials and industrial logistics as well as creating a conducive business climate so that the manufacturing sector remains competitive in the midst of global dynamics.

"We will continue to work with relevant ministries/institutions to ensure that the domestic industry remains active, adaptive and competitive. This resilience must be maintained because the manufacturing sector is the backbone of the national economy," he concluded.