FX.co ★ Indonesia Manufacturing Returns to Expansion

In August 2025, the S&P Global Indonesia Manufacturing PMI climbed to 51.5, up from 49.2 the previous month, achieving its highest level since March. This increase signifies the first rise in factory activity in five months, attributed to a resurgence in both output and new orders following a four-month decline. Additionally, foreign demand saw its most significant increase since September 2023. Employment experienced a modest uplift, breaking a three-month trend of job losses, while firms effectively managed workloads as backlogs diminished for the fifth consecutive month. Purchasing activity saw an upswing, resulting in increased input inventories. Notably, delivery times remained relatively stable despite prevailing shipping delays. In terms of prices, input cost inflation persisted at a solid rate, though it remained below the long-term average and approached a five-year low. However, a stronger U.S. dollar led to increased costs for imported raw materials. Concurrently, selling prices rose at their fastest rate since July 2024. Lastly, business sentiment improved, driven by expectations of stronger demand, upcoming product launches, and enhanced consumer spending capacity.