The Ministry of Industry (Kemenperin) has responded to the latest S&P Global report showing that Indonesia’s manufacturing Purchasing Managers’ Index (PMI) fell from 50.0 in May to 46.9 in June, signaling a return to contraction. According to Ministry of Industry spokesperson Febri Hendri Antoni Arief, the decline was driven by weakening demand in both the domestic and export markets, leading to lower production activity, reduced raw material purchases, and slower hiring. At the same time, manufacturers faced rising production costs due to higher raw material prices and a weakening rupiah, pushing input price inflation to its second-highest level since the PMI survey began in 2011.
“We need to view this situation as a challenge that must be addressed by strengthening policies to enhance the competitiveness of the national manufacturing sector,” Febri said in a written statement on Wednesday (July 1, 2026).
According to Febri, the decline in the PMI was primarily caused by weaker demand and rising production costs. Therefore, the government’s immediate priority is to ensure that strategic policies are implemented effectively to ease the burden on manufacturers and support a recovery in industrial activity. One policy expected to deliver a significant impact is the implementation of the Specific Natural Gas Price (HGBT) program. The program is considered a key instrument for reducing energy costs in industries that rely on natural gas as a raw material or primary energy source.
“This policy has been well received by industry players and has proven effective in improving production efficiency while maintaining the competitiveness of Indonesian-manufactured products. Therefore, the implementation of HGBT needs to be further strengthened so that its benefits can be fully realized by all eligible industries,” Febri said.
On Monday (June 29), the government decided to reduce the price of liquefied natural gas (LNG) for industrial users to US$13 per MMBtu from the previous range of around US$20-23 per MMBtu. The measure is intended to strengthen the competitiveness of Indonesia’s manufacturing sector and help prevent layoffs.
“The reduction in industrial gas prices resulting from LNG regasification is a breath of fresh air for manufacturers and one of the measures that can help return the Manufacturing PMI to expansion territory in the coming months,” Febri said.
He also stressed that protecting the domestic industry has become increasingly important as global economic challenges intensify. According to him, such protection is essential not only for ensuring business continuity but also for safeguarding jobs, maintaining employment, and minimizing the risk of layoffs.
“In a situation where, competing countries continue to pursue expansionary policies, the government will not remain idle. Through close coordination and collaboration across ministries and government agencies, we will continue to create a conducive business environment,” he said.
Febri added that these efforts are aimed at strengthening Indonesia’s industrial competitiveness and expanding opportunities in both domestic and export markets. In addition to the HGBT program and measures to protect domestic industries, the Ministry of Industry is accelerating several strategic initiatives, including increasing the use of locally made products, facilitating manufacturing investment, protecting the domestic market from unfair trade practices, and expanding exports to non-traditional markets. Despite the contraction in June, the ministry noted that the S&P Global survey showed stronger business optimism among manufacturers for the next 12 months compared with the previous month, supported by expectations of easing cost pressures and improving market demand.
June 30, 2026, detikFinance
(https://finance.detik.com/industri/d-8555392/pmi-manufaktur-ri-masuk-zona-merah-kemenperin-ungkap-penyebabnya)