TEMPO.CO, Jakarta - Indonesia's Industrial Confidence Index (IKI) is down 0.60 points month-to-month to 52.9 in June, lower than the 53.6 in May 2026, according to the country's Ministry of Industry. Ministry spokesperson Febri Hendri Antoni Arief said on Tuesday that the challenges this month "not only related to production but also demand."
Industry challenges this month move beyond global price hikes and rupiah depreciation, but now include rolling blackouts that have been suffered across several regions in the country.
This condition caused industries and power-forward industrial areas to halt their production during the outages.
Besides power outages, the industry is facing pressure from increased gas prices, especially those originating from LNG regasification. Nevertheless, the ministry appreciates government efforts to lower the price of regasified gas to US$13 per MMBTU, which proves to be a breath of fresh air for industry players, Febri said.
On the side of demand, Febri observed that while the demand remained high and inflation under control last month, this was not the case for June 2026.
The Ministry of Industry, Febri said, recorded a surge in the prices of household consumption goods. The rise in non-subsidized fuel prices, according to Febri, has eroded the people's purchasing power, as spending declines, especially in manufactured product purchases.
Despite all the challenges, Febri maintained that the industry is still resilient, especially supported by a significant domestic demand. The Ministry of Industry predicts that the purchasing power will remain stable.
Government spending, especially on flagships programs such as free nutritious meals, village cooperatives, B50 implementation, and fishers' villages, will boost the demand for manufactured products.
Based on the components of the Industrial Confidence Index in June 2026, there were 22 sub-sectors that expanded and one that contracted. Dozens of expanding sub-sectors contributed 98.6 percent to the total non-oil industry gross domestic product in the first quarter. The highest sub-sector is beverages and ready-made garments, while the contracted sub-sector is leather, leather goods, and footwear.
Based on variable values, new orders slowed by 0.12 points to 53.5. Production variables also down by 0.92 points in June 2026. Similarly, the inventory variable for products decreased by 1.61 and entered the contraction zone.
Based on market orientation, the Ministry of Industry noted that the performance of domestically oriented industries decreased by 2.30 to 51.16. Meanwhile, export-oriented industries experienced a growth of 0.33 points to 54.06. Febri stated that the increase in export performance was influenced by the positive growth of export destination countries.
Read: Indonesia Confident of Reaching 8% Economic Growth
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