Business · Economy · 13 hrs ago
Indonesia’s Industry Minister Says Manufacturing Is Expanding
Industry Minister Muhammad Sarmuji says Indonesia is not undergoing deindustrialization and that manufacturing is expanding.
He cited non-oil and gas manufacturing growth of 5.32% in 2026, above national economic growth of 5.29%.
He also said manufacturing grew 5.3% in 2025, compared with 5.11% growth for the economy.
The sector employed 19.98 million people by May 2026, and its exports made up 82.40% of Indonesia’s exports through August.
Sarmuji said the large domestic market also supports industry, absorbing most of the country’s manufactured products.
But factories were using only 66.13% of their production capacity in February, and the government wants to lift that to 80–85%.
The government also wants processing of raw materials to lead to finished goods, stronger local suppliers and more value added in Indonesia.
Industry Minister Muhammad Sarmuji said Indonesia’s manufacturing sector is expanding, rejecting claims that the country is undergoing deindustrialisation.
Non-oil and gas manufacturing grew 5.32% in 2026, compared with national economic growth of 5.29%, according to Sarmuji.
He said manufacturing grew 5.3% in 2025, above the economy’s 5.11% growth.
Manufacturing employed 19.98 million people through May 2026, and its exports reached US$159.55 billion through August.
The two reports give slightly different October 2026 Industry Confidence Index readings: 53.75 and 53.77, both above the previous month’s 51.9.
- Who
- Industry Minister Muhammad Sarmuji.
- What
- He said Indonesia’s manufacturing sector is expanding and rejected claims that the country is undergoing deindustrialisation.
- When
- He made the remarks on October 30, 2026.
- Where
- At the 2026 National Leadership Meeting of the Indonesian Chamber of Commerce and Industry in Jakarta.
- Why
- He cited manufacturing growth and other sector indicators to counter claims of deindustrialisation.
This story does not have two clearly opposing sides.
Manufacturing grew 5.3%, while national economic growth was 5.11%, according to Sarmuji.
Non-oil and gas manufacturing capacity utilisation was 66.13%, according to CNBC Indonesia.
Manufacturing employed 19.98 million people, according to Sarmuji.
Manufacturing exports reached US$159.55 billion, or 82.40% of national exports.
Indonesia’s manufacturing PMI was 52.1, in expansion territory, according to CNN Indonesia.
Sarmuji said at a meeting in Jakarta that manufacturing was expanding, not contracting.
- Minister
- Muhammad Sarmuji
- Non-oil and gas manufacturing growth, 2026
- 5.32%
- National economic growth, 2026
- 5.29%
- Manufacturing employment through May 2026
- 19.98 million people
- Manufacturing exports through August 2026
- US$159.55 billion; 82.40% of total exports
- Industry Confidence Index, October 2026
- 53.75 in CNN Indonesia; 53.77 in CNBC Indonesia
2 sources
What people are saying
Our manufacturing industry is not contracting, but is actually expanding.
The actual data shows something different.
Downstream processing of our natural resources is the starting point for industrialisation.