Domestic Demand Falls, Indonesian Manufacturing Sector Weakens in June 2025

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Adi Ahdiat 01/07/2025 13:16 WIB

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According to the Purchasing Managers' Index (PMI) report released by S&P Global, Indonesia's manufacturing sector weakened in June 2025, primarily due to decreased domestic demand.

Indonesia Manufacturing PMI (January 2020 - June 2025)

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Indonesia Manufacturing PMI (January 2020 - June 2025)

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Indonesia's manufacturing industry weakened in June 2025, influenced by decreased domestic demand.

This condition is evident from the Purchasing Managers' Index (PMI) report released by S&P Global Market Intelligence.

S&P Global Market Intelligence compiles the PMI index based on a survey of managers from hundreds of sample manufacturing companies.

The survey indicators include growth in production volume, export and domestic orders, workforce numbers, supply delivery times, and the stock of materials purchased by each company.

The results are then processed into a score on a scale of 0-100. A PMI score below 50 reflects a weakening or contraction; a score of 50 means stable or no change; and a score above 50 indicates strengthening or expansion compared to the previous month.

In June 2025, Indonesia had a manufacturing PMI score of 46.9, down from May 2025. This figure reflects an increasing number of Indonesian manufacturing industries experiencing contraction.

"The contraction in the health of the Indonesian manufacturing sector accelerated at the midpoint of 2025, boding poorly for the coming months. Demand conditions were detrimental to growth, with sales falling to the greatest extent since August 2021, thus contributing to a further solid reduction in production levels," said S&P Global in a press release on Tuesday (July 1, 2025).

"The reduction in sales was largely domestic-driven, as export sales stabilised on the month," they said.

S&P Global also found that the decrease in demand prompted companies to reduce their workforce and the purchase of production materials.

"Looking forward, firms were less bullish towards the outlook for output. In fact, the level of business confidence was at the lowest since last October as some firms raised concerns regarding the health of the global economy," they said.

Editor : Adi Ahdiat

"Disclosure: This is an AI-generated translation of the original article. We strive for accuracy, but please note that automated translations may contain errors or slight inconsistencies."

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Domestic Demand Falls, Indonesian Manufacturing Sector Weakens in June 2025

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