JAKARTA — Indonesia’s manufacturing sector showed further signs of weakness in June 2025, with the latest data from S&P Global reporting a decline in the Purchasing Managers’ Index (PMI) to 46.9, down from 47.4 in May.
A PMI reading below 50 indicates a contraction in industrial activity, signalling continued sluggishness across the national manufacturing landscape.
Febri Hendri Antoni Arief, spokesperson for the Ministry of Industry, explained that the contraction reflects persistent uncertainty clouding the sector. Many manufacturers, he noted, have slowed production while awaiting more pro-business government policies.
“This contraction shows that the industry is still waiting for clear policy support, while dealing with weakening export orders and subdued domestic demand,” Febri stated in a press release on Wednesday, 2 July 2025.
He added that household purchasing power has declined, which in turn has affected overall factory output.
Meanwhile, economist Ninasapti Triaswati from the University of Indonesia observed that the continued decline in PMI is a sign that Indonesia’s macroeconomic conditions are under mounting pressure.
“This indicator suggests a weakening in both investment and employment. It implies some companies may be edging towards bankruptcy, which is worrying given the manufacturing sector’s role in job creation,” she told Beritasatu.com.
Nina also pointed to recent waves of layoffs, partly driven by companies shifting to automation technologies to sustain productivity under economic strain — though at the cost of reducing their workforce.
Despite this, she sees growth opportunities in other sectors, notably agriculture, which demonstrated resilience and positive growth in Q1 2025.
“There’s potential for Indonesia to redirect part of its workforce into agriculture, then build towards agribusiness and agro-based industries. We also have significant potential in the marine, forestry, and plantation sectors, which play a vital role in food security and could serve as a new foundation for manufacturing growth,” she explained. (DH)
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