Gotrade News - Indonesia's manufacturing sector reached its strongest level in 2.5 years during the first quarter of 2026 according to Bank Indonesia. The central bank's PMI-BI index hit 52.03% up from 51.86% in the previous quarter marking the highest reading since Q3 2023.
Key Takeaways:
- PMI-BI reached 52.03% in Q1 2026, the highest in 2.5 years signaling manufacturing expansion
- Production capacity rose to 73.33% driven by agriculture and manufacturing sectors
- BI Governor Perry Warjiyo outlined 3 economic resilience pillars at the IMF-World Bank forum
A PMI-BI reading above 50% indicates the manufacturing sector is in expansion rather than contraction territory. Finished goods inventory, production volume, and total order volume all registered expansion across most business sub-sectors.
The strongest-performing industries included paper and paper products, printing and media reproduction, leather and footwear production, and food and beverage manufacturing. Production capacity utilization also increased to 73.33% from 73.15% in Q4 2025 driven by agricultural and manufacturing gains.
BI's Business Activity Survey showed a Weighted Net Balance of 10.11% with positive performance across financial services, agriculture, manufacturing, and wholesale trade. BI Communications Director Anton Pitono attributed the growth to increased demand during major religious holidays in Q1 2026 including Lunar New Year, Nyepi, and Ramadan.
Three Pillars of Economic Resilience
BI Governor Perry Warjiyo presented three pillars of Indonesia's economic resilience at the IMF-World Bank Spring Meetings 2026 in Washington D.C. on April 15. The three factors are policy credibility, adaptive capacity, and international partnerships.
Policy credibility is achieved through consistency and coordination of monetary policy, fiscal measures, and financial system stability. Adaptive capacity refers to the continuous adjustment of policy frameworks to match evolving global dynamics and emerging risks.
BI projects the manufacturing sector will remain expansionary in Q2 2026 with potential performance exceeding Q1 results. Survey respondents forecast the Weighted Net Balance rising to 14.80% supported by harvest season, increased mining activity, and new construction project launches.
Sources:
- BloombergTechnoz, Laporan BI: Aktivitas Manufaktur RI Terbaik dalam 2,5 Tahun, 2026
- Kompas, Bos BI Ungkap 3 Resep Ketahanan Ekonomi Indonesia, 2026
- Kumparan, BI: Kegiatan Dunia Usaha Kuartal I 2026 Positif, 2026
