Indonesia’s Manufacturing PMI stood at 47.4 in May, rising from 46.7 in April but still well below 50, indicating continued contraction, according to the latest data from S&P Global.
New orders fell at the sharpest rate since August 2021, while exports also declined — notably in shipments to the US.
Subsector highlights
- Output fell for a second month, though the pace of decline was slower than in April.
- Purchasing activity and inventories were cut as firms adjusted to weaker demand.
- Employment increased, driven by optimism for recovery and additional capacity.
- Input costs rose more sharply, largely due to rising raw material prices.
- Selling prices barely increased, as firms absorbed higher costs and offered discounts to support sales.
- Supplier delivery times lengthened, reportedly due to poor weather and transport delays.
- Business sentiment improved, with confidence in output growth over the next 12 months strengthening from April.
Indonesia’s manufacturing sector continues to face weak domestic and external demand, though sentiment suggests firms are preparing for recovery.
The steep drop in new orders and muted exports highlight persistent headwinds, but rising employment and resilient outlooks indicate confidence in a rebound later in 2025
For some context, Vietnam’s manufacturing sector showed signs of stabilisation in May, with the Purchasing Managers’ Index rising to 49.8 from 45.6 in April. Conversely, the Philippines’ PMI fell to 50.1 in May, down from 53.0 in April.
See also: Manufacturing in Indonesia 2025: Key Sectors, FDI & Challenges