Executive Summary

Key insights and market outlook

Indonesia's Manufacturing Purchasing Managers' Index (PMI) slowed to 51.2 in December 2025 from 53.3 in November 2025, indicating continued expansion but at a weaker pace ¹

²³. The decline was attributed to weakening demand both domestically and internationally, with experts citing post-peak year-end consumption slowdown and global manufacturing cycle weakness ². Despite the slowdown, the sector remained in expansion territory, supported by continued domestic demand ³.

Full Analysis

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Deep Dive Analysis

Indonesia's Manufacturing Sector Shows Slower Expansion in December 2025

Weakening Demand Impacts Manufacturing Growth

Indonesia's manufacturing sector continued to expand in December 2025, but at a slower pace, as indicated by the S&P Global Purchasing Managers' Index (PMI) dropping to 51.2 from 53.3 in November 2025 ¹

²³. This slowdown reflects both domestic and international demand weaknesses, with experts pointing to post-year-end consumption normalization and global manufacturing cycle weakness as key factors ².

Domestic Demand Remains Key Support

Despite the overall slowdown, the manufacturing sector maintained its expansion, primarily supported by continued domestic demand ³

. The S&P Global data showed that new orders continued to rise for the fifth consecutive month, albeit at a slower rate than the previous month. Production also increased, though the growth remained marginal due to supply chain constraints ³.

Expert Analysis and Market Implications

Economists from various institutions provided insights into the PMI data. Maybank Indonesia's Global Market Economist, Myrdal Gunarto, attributed the slowdown to reduced manufacturing activity, possibly due to extended year-end holidays ¹

. Meanwhile, Muhammad Rizal Taufikurahman from Indef highlighted that domestic consumption post-peak season showed signs of softening, particularly among the middle class whose purchasing power has not fully recovered ².

Regional Context and Comparison

The performance of Indonesia's manufacturing sector can be seen in the context of broader regional trends. Other Asian economies, such as South Korea and Taiwan, showed signs of recovery in their manufacturing sectors, driven by rebounding export demand and global technology product demand ⁵

. South Korea's manufacturing PMI returned to expansion territory at 50.1 in December 2025 after two months of contraction, supported by improving export orders ⁴.

Conclusion

The December 2025 PMI data highlights the challenges facing Indonesia's manufacturing sector, including weakening demand and supply constraints. However, the continued expansion, albeit at a slower pace, indicates resilience in the sector. The domestic demand has been a crucial factor supporting this growth, while global economic conditions continue to pose challenges.

References