TEMPO.CO, Jakarta - The Ministry of Industry reported that the Industrial Confidence Index stood at 52.30 in August 2026. The figure saw a decline from July 2026, when the index reached 53.10.
"[The index] remains above 50, still in an expansion level, even though it slowed by 0.80 points compared to July 2026," Ministry of Industry spokesperson Febri Hendri Antoni Arief said in an online statement released on Tuesday, June 30, 2026.
In addition to the month-on-month slowdown, Febri noted that the August 2026 index dropped by 1.25 points compared to the 53.55 recorded during the same period last year.
Out of 23 manufacturing subsectors, 22 continued to expand. These expanding subsectors contributed 98.6 percent to the Gross Domestic Product (GDP) of the non-oil and gas manufacturing sector in the second quarter of 2026. The two subsectors logging the highest confidence scores were the beverage industry and the chemicals and chemical products industry. Meanwhile, the single subsector in contraction territory was the leather, leather goods, and footwear industry.
In August, the Ministry of Industry recorded a 0.67-point slowdown in the index's new orders variable. Conversely, the production variable posted a 0.55-point increase. Meanwhile, product inventories fell by 3.16 points, keeping that sub-index locked in contraction at 46.02.
Export performance likewise registered a month-on-month deceleration of 0.80 points.
According to Febri, this weakening was driven by rising domestic export costs. Similarly, domestic trade performance slowed by 0.86 points in August.
Febri explained that the food industry, particularly crude palm oil (CPO), achieved the highest performance growth among all subsectors in August. This growth was bolstered by higher export market prices and deferred CPO demand tied to the transition toward the B50 biodiesel program.
"We expect domestic CPO demand to continue rising in line with President Prabowo Subianto's energy security initiatives, particularly the transition beyond B40," Febri said.
For August, Febri reported that overall business activity expanded by 0.7 points on a monthly basis. Concurrently, the proportion of manufacturers reporting improved business conditions fell by 0.4 percent. However, the share of business leaders reporting worsening conditions also dropped by 0.7 percent in August.
Business optimism regarding economic conditions over the next six months dipped by 1.2 percent. A total of 27.4 percent of business operators expected conditions to remain stable over the next half-year. Meanwhile, 6.0 percent of respondents expressed pessimism regarding their business prospects over the same six-month period.
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