FX.co ★ Indonesia Manufacturing PMI Falls Back Into Contraction

Indonesia’s S&P Global Manufacturing PMI edged down to 49.8 in August 2026 from July’s five‑month high of 50.2, indicating a slight deterioration in manufacturing conditions. Both output and employment declined in five of the past six survey periods, with the most recent fall in production linked to stronger competitive pressures and higher selling prices.

Overall demand conditions were broadly stable, while outstanding business rose for a second consecutive month, albeit at a slower rate. Purchasing activity levelled off after five months of contraction. Supplier delivery times lengthened modestly, with delays only marginally worse than in July.

On the cost side, price pressures continued to ease; however, both input costs and output charges remained high by historical standards. Firms cited elevated raw material and supplier prices, which were frequently passed on to customers. Despite these headwinds, business confidence improved to a seven‑month high, underpinned by expectations of firmer future demand and relatively stable market conditions that could support higher production over the coming year.