Indonesia's Manufacturing Sector Sluggish in May 2025, Demand Remains Weak

Economics & Macro

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Adi Ahdiat 02/06/2025 17:27 WIB

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

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

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Indonesia's manufacturing sector slumped in May 2025, primarily due to persistently weak demand.

This condition is evident in 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 at hundreds of sample companies.

The survey indicators include production volume growth, export and domestic orders, workforce size, supply delivery times, and purchased material stock levels for each company.

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

In May 2025, Indonesia's manufacturing PMI score was 47.4. Although slightly higher than in April 2025, this score reflects that Indonesia's manufacturing industry remains generally in the contraction zone.

"Indonesia's manufacturing economy contracted at a moderate pace during May, as the strongest fall in new orders in almost four years contributed to a solid
reduction in production volumes," said S&P Global in a press release on Monday (June 2, 2025).

"Exports also continued to fall, while firms looked to adjust their inventory and buying levels in response to weaker demand conditions," they said.

However, S&P Global assesses that Indonesian manufacturing companies generally have fairly strong confidence, evidenced by the increase in workforce recruitment.

"Firms were confident that the current malaise would pass and growth would resume, as confidence regarding the 12-month outlook for output strengthened
from that seen in April," said S&P Global.

"Moreover, manufacturers raised employment for the fifth time in the past six months in preparation for an eventual recovery in demand," 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."