Indonesia’s manufacturing sector faced significant volatility in early 2025, with the S&P Global Manufacturing PMI peaking at 53.6 in February before sharply contracting to 46.7 in April and slightly recovering to 47.4 in May. This downturn reflects weakened domestic demand, export declines—particularly to the U.S.—and rising input costs that led to reduced purchasing and over 24,000 layoffs by May. Despite the setbacks, the sector still showed structural resilience, contributing a steady 17% to GDP, and achieving 4.31% year-on-year growth in Q1, driven by strong performance in sub-sectors like food and beverages. To counter these challenges, the government has implemented policy measures focusing on downstream industrialization (hilirisasi), reforms to the local content regulation (TKDN), and regional industrial equity through Special Industrial Zones (KIT). President Prabowo Subianto has called for relaxed TKDN rules to attract more foreign investment, while business groups have urged for streamlined licensing and infrastructure development. Although PMI remains below the expansion threshold, improving employment and business sentiment, coupled with ongoing reforms and targeted support for strategic sectors, suggest that Indonesia’s manufacturing industry could begin to recover in the second half of 2025.Source: https://business-indonesia.org/news/indonesia-s-manufacturing-sector-growth-amid-global-and-domestic-pressures  (ICE GIACARTA)

Fonte notizia: Business-Indonesia.org, 12 June 2025