Indonesia’s manufacturing confidence strengthens in October

Indonesia’s Industrial Confidence Index (IKI) gained 1.84 points in October 2026 to reach 53.77, the Industry Ministry said, as manufacturers reported stronger orders and output. The reading compared with 51.93 in September and 53.50 in October 2025.

Readings above 50 indicate expansion; those below that threshold indicate contraction. Industry Ministry Secretary General Eko S.A. Cahyanto said most of the 23 subsectors surveyed performed strongly. Among respondents, 67.4 per cent were confident about business prospects over the coming six months, while the pessimistic share fell from 5.8 per cent to 5.5 per cent.

The new orders measure advanced 2.68 points from September to 56.08, while the production output measure gained 1.60 points to 55.38. The inventory reading rose 0.15 points to 45.60, its fifth consecutive month below 50, as finished products were dispatched quickly to fulfil demand.

Stable or improving operations were reported by 80.4 per cent of manufacturers, compared with 77.9 per cent in September. Those reporting slower activity accounted for 19.5 per cent. Export-focused manufacturers recorded an index of 53.93, against 53.55 for producers serving the domestic market.

Cahyanto linked some of the improvement to higher seasonal production before year-end celebrations. The food subsector reached its strongest index reading of the year. Ministry director Merrijantij Punguan Pintaria attributed that rise to increased domestic and export orders, but said logistics constraints still affected shipments and storage.

Paper manufacturers moved back into expansion following September’s contraction, helped by packaging demand before Christmas and New Year. Four subsectors contracted: wood and cork products; printing and recorded-media reproduction; rubber and plastics; and furniture. The ministry cited weaker export orders, raw-material supply disruptions, increased production costs and softer global demand.