BRI Survey Reveals Improving UMKM Optimism for Q4 2025

Rising Business Expectations

The BRI Research Institute's latest survey on UMKM (Micro, Small, and Medium Enterprises) shows a positive outlook for Q4 2025. The Business Expectations Index rose to 120.7 from 116.5 in Q3 2025, indicating growing confidence among business owners about future growth prospects. This optimism is supported by several key factors, including stable input prices and favorable weather conditions that have boosted productivity in agricultural and fishing sectors.

Business Expansion Continues

The survey found that UMKM business activities remain in an expansion phase, with the Business Activity Index standing at 101.9. This expansion is driven by normalized activity post-Hari Besar Keagamaan Nasional (HBKN) and school holidays, particularly for UMKM operating around workplaces and schools. According to Akhmad Purwakajaya, Director of Micro BRI, "The combination of stable input prices and favorable weather conditions has increased productivity in agriculture and fishing sectors."

Challenges to Profitability

Despite the positive outlook, the survey highlighted concerns regarding UMKM profitability. The Rentability Index, which measures businesses' ability to generate profits, has declined. This decrease is attributed to falling sales volume and rising input costs, particularly in the manufacturing and trading sectors. These factors have negatively impacted sales and eroded business profits, potentially affecting UMKM's ability to make timely loan repayments.

Sentiment and Expectations

The survey also revealed that the Business Sentiment Index among UMKM stood at 111.9 in Q3 2025, indicating that more business owners had a positive than negative outlook. Moreover, expectations for Q4 2025 have strengthened, with the index rising to 134.8 from 133.3 in the previous quarter. This optimism is supported by positive views on business prospects, respondent's business outlook, and national economic prospects.

Government Performance Assessment

UMKM operators continue to give high marks to the government's performance, with the Government Performance Index remaining high at 121.1. This suggests that businesses still have confidence in the government's ability to manage key tasks effectively.