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View all search resultsManufacturing shrinks in April as costs surge on Mideast war
Output declined in April at the fastest pace in nearly a year, with firms pointing to higher input prices, material shortages and weaker purchasing power due to the ongoing US-Israeli war on Iran.
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Workers produce noodles on Jan. 14, 2023, at a factory in Surabaya, East Java. (AFP/Juni Kriswanto)
D
omestic manufacturing again slipped into contraction territory in April as surging raw material costs and supply disruptions linked to the Middle East conflict weighed on production and business sentiment.
The manufacturing purchasing managers’ index (PMI) fell to 49.1 in April from 50.1 in March, dropping for the first time in nine months below the 50-point threshold separating expansion from contraction, according to an S&P Global survey released on Monday.
Output declined at the fastest pace in nearly a year, with firms citing higher input prices, material shortages and weaker purchasing power among customers.
The decline in output marked a second straight month of contraction, with the pace of reduction accelerating to its fastest since May 2025, underscoring the strain on producers as costs rise and demand softens.
Read also: Manufacturing stagnated in March amid price, supply strains caused by war
The downturn came despite a slight increase in new orders, largely driven by advance purchase as clients sought to hedge against further price increases and potential supply disruptions.
“Indonesia's manufacturing sector saw intensifying inflationary pressures start to bite in the midst of the war in the Middle East,” Usamah Bhatti, an economist with S&P Global Market Intelligence, said in a statement on Monday.
