Indonesia’s Manufacturing PMI Rises to 54.0 as Output Grows at Fastest Pace Since March 2024
Key Facts
Indonesia’s manufacturing Purchasing Managers’ Index rose to 54.0 points in October 2026, from 52.4 points in September, remaining above the 50-point threshold separating expansion from contraction, according to data reported by the Jakarta Post. Output recorded its fastest increase since March 2024, as domestic demand and export orders improved, the report said. Growth in new orders expanded for a third consecutive month, reaching its fastest pace since October 2021. New export orders also recorded their highest growth rate since the PMI survey began in April 2011, according to Antara. This indicates that stronger factory activity in October was accompanied by an increase in external demand as well as an improvement in domestic demand.
The Jakarta Post said improved customer confidence and new product launches supported the rise in new orders. Stronger demand drove output to its largest increase since March 2024. Expanding orders across the domestic and export markets broadened the base of industrial activity during the month, while growth in external orders gave sales and output an additional boost. Indonesian Industry Minister Muhammad Sarmuji said, according to Antara, that the improvement reflected continued gains in industrial activity. He called for maintaining the momentum to strengthen the sector’s contribution to economic growth, job creation and industrial competitiveness.
But the expansion in activity did not translate into hiring to the same degree: employment rose only marginally in October, and the pace of job creation slowed from September, according to the PMI reported by the Jakarta Post. At the same time, backlogs increased for a fourth consecutive month. This divergence places rising demand alongside signs of continued pressure on factories to fulfill work. Output and orders therefore improved more clearly than the industrial labor market during the month. Sarmuji linked the continuation of the momentum to its ability to support jobs, as well as growth and competitiveness.
The improvement in the PMI coincided with a rise in the government’s Industrial Confidence Index to 53.77 points in October, up 1.84 points from 51.93 in September, according to Antara. October’s reading also exceeded the 53.50 points recorded in the same month of 2025 by 0.27 points. The government index offers another reading of improving confidence in the industrial sector during the month, alongside the broader activity reflected in PMI data. The government reading rose in parallel with faster growth in output and new orders. Together, the two indexes kept October’s picture of the sector tied to improving activity and confidence, with hiring still limited and backlogs rising.
In the broader economy, Indonesia’s gross domestic product grew 5.47% year on year in the third quarter of 2026, accelerating from 5.29% in the second quarter, according to Antara, citing Bank Indonesia data. Household consumption rose 5.04% year on year in the third quarter, while government spending increased 8.95% and investment rose 6.06%. These data place industry within a period in which the economy grew faster in the third quarter, supported by increases in major spending and investment components. The 5.47% reading refers to third-quarter year-on-year growth and was published on November 5; it is not a separate annual growth rate. The comparison between industrial activity in October and GDP growth in the third quarter is also based on different periods.
Antara reported that Indonesia’s October PMI exceeded readings in several Asian economies, with Japan at 53.3 points, Vietnam at 52.3, China at 52.0, South Korea at 51.3 and Malaysia at 51.0. Australia recorded 49.6 points, below the 50-point expansion threshold. The comparison shows Indonesia’s 54.0-point reading was higher than the readings cited, while Australia remained in contraction. It reinforces Indonesia’s position among regional manufacturing readings for the month. These figures compare October PMIs, while Indonesia’s economic growth data measure the third quarter.