Indonesia’s S&P Global Manufacturing PMI dropped sharply to 46.9 in June 2026 from 50.0 in May, its lowest level since June 2025 and indicating the sector’s second contraction this year. New orders declined for the first time in three months—and at the fastest pace in a year—highlighting weakening purchasing power amid rising prices. Export sales also slumped, registering their steepest fall since August 2021.
Output contracted for a fourth consecutive month, at the quickest rate since April 2025. Firms reduced input purchases and cut jobs at the fastest pace in nearly five years. Backlogs of work continued to ease, and supplier delivery times lengthened for a ninth straight month, although the delays were less severe than before.
On the cost front, inflationary pressures strengthened markedly: input costs rose to the second-highest level recorded since the survey began in 2011, driving the fastest increase in selling prices since 2013. Despite the downturn, business confidence improved to a three-month high, with firms optimistic that cost pressures will gradually abate.
