Antara News·Indonesia·Monday, November 9, 2026 at 11:24 AM UTC

Indonesia highlights SMI contributions to record manufacturing growth

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Ahmad Muzdaffar Fauzan, Yashinta Difa

Jakarta (ANTARA) - Small and medium-sized industries (SMIs) remain the backbone of Indonesia’s industrial expansion, driving job creation and regional economic growth as the manufacturing sector outpaces national economic expansion for the first time since 2011.

Speaking at a national SMI product exhibition in Jakarta on Monday, Deputy Minister of Industry Faisol Riza underscored the vital role played by the sector's 4.2 million business units.

"Small and medium-sized industries play a crucial role in these positive industrial developments—particularly in creating jobs, fostering regional economic potential, and strengthening the national industrial supply chain," Faisol stated.

He highlighted that the growth of the manufacturing industry in 2025 successfully outpaced the national economic growth rate—a milestone not reached since 2011, or 14 years prior.

According to data from Statistics Indonesia (BPS) for the third quarter of 2026, the manufacturing industry grew by 5.87 percent year-on-year (yoy), surpassing the national economic growth rate of 5.47 percent.

This lifted the sector's contribution to Gross Domestic Product (GDP) to 19.22 percent, valued at Rp1,168.99 trillion (approximately US$64.94 billion).

In terms of investment, the manufacturing sector accounted for Rp246.9 trillion (US$13.72 billion) in the third quarter of 2026—representing 46.7 percent of total national investment.

As of May 2026, the sector employed 19.88 million people.

Meanwhile, exports from the manufacturing industry between January and September 2026 accounted for 82.64 percent of total national exports, amounting to US$182.83 billion.

This positive momentum is further reflected in Indonesia’s Manufacturing Purchasing Managers' Index (PMI), which stood at 54.0 in October 2026.

This figure is higher than those for Japan (53.3), Vietnam (52.3), China (52.0), South Korea (51.3), Malaysia (51.0), and Australia (49.6).

According to Faisol, this achievement marks the highest level in the last 31 months and represents the strongest expansion since March 2024.

Furthermore, the Industrial Confidence Index (IKI) strengthened to 53.77 in October 2026. This growth was driven by the fastest increase in new orders seen in the last five years, alongside a rise in new export orders that reached a record high since the survey began in 2011.

Despite representing 99.78 percent of all industrial business units and employing 12.34 million workers (63.27 percent of the total industrial workforce), SMIs currently account for 21.73 percent of total industrial value-added—highlighting significant room for productivity enhancement.

To accelerate SMI growth and market integration, the Industry Ministry launched the "Buy SMI Products" exhibition as part of the 2026 National Industrial Discount Program for Domestic Products.

Running from November 9 to 12, 2026, in Jakarta, the four-day event showcases offerings from 64 ministry-backed enterprises—spanning processed foods, fashion and batik, footwear and leather goods, jewelry and accessories, children’s toys, furniture, cookware, metal products as well as electric bicycles and multi-purpose vehicles.

The ministry’s Director General of Small, Medium, and Miscellaneous Industries (IKMA), Reni Yanita, noted that the exhibition features structured business matching sessions hosted in collaboration with the Indonesian Retailers and Shopping Center Tenants Association (HIPPINDO) to bridge SMI operators with modern retail, restaurant, and café networks.

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