Indonesia's Manufacturing Sector Slumps in April 2025, Falling Demand Triggers Layoffs

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Adi Ahdiat 02/05/2025 12:10 WIB

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Indonesia Manufacturing Purchasing Managers' Index (PMI) (January 2020 - April 2025)

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Indonesia Manufacturing Purchasing Managers' Index (PMI) (January 2020 - April 2025)

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Indonesia's manufacturing industry slumped in April 2025. This was influenced by declining demand, which subsequently triggered layoffs (PHK).

This condition is evident from the Purchasing Managers' Index (PMI) report released by S&P Global Market Intelligence.

S&P Global Market Intelligence compiles the PMI index from a survey of managers from hundreds of sample companies.

The survey indicators include growth in production volume, export and domestic orders, workforce numbers, supply delivery times, and the stock of materials purchased by each company.

The results are then processed into a score on a scale of 0-100. A PMI score below 50 reflects a weakening or contraction; a score of 50 means stable or no change; and a score above 50 indicates strengthening or expansion compared to the previous month.

In April 2025, Indonesia had a manufacturing PMI score of 46.7, entering the contraction zone and reaching its lowest level in the last three years.

"Demand reportedly weakened, both from the domestic and foreign markets. Producers reduced their workforce in April due to declining production needs and demand," said S&P Global in a press release on Friday (May 2, 2025).

"In response to this situation, companies implemented layoffs, reduced spending, and decreased the amount of input and finished goods stock," it continued.

S&P Global also assessed that there are no signs of improvement in the near future.

"The short-term outlook remains bleak as companies divert capacity to complete outstanding obligations due to lack of sales. This condition appears likely to continue for the next few months," they said.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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