Indonesia’s manufacturing sector aims for 5.51% GDP growth in the non-oil and gas processing industry in 2026 (15/01). Minister of Industry Agus Gumiwang Kartasasmita said the sector remains a key driver of the national economy despite global economic uncertainty.

“Manufacturing continues to grow above 5 percent and acts as the engine of the national economy. We are optimistic that this performance can be maintained and enhanced throughout 2026,” he stated. Policy directions focus on strengthening domestic value chains, deepening the industrial structure, and optimizing inter-sector linkages to support sustainable growth.

1,236 Industrial Companies Set to Start Production

According to Ministry of Industry data as of 15 January 2026, 1,236 industrial companies that began construction in 2025 are planned to start production for the first time in 2026.

The new production is expected to absorb 218,892 workers, supported by Rp551.88 trillion in investment, including Rp444.25 trillion outside land and building costs.

“New production capacity starting in 2026 will help secure supply, strengthen manufacturing structure, and create new jobs,” Minister Agus explained.

Domestic Market Remains Key Growth Driver

The domestic market will continue to support around 80% of manufacturing demand in 2026, with exports accounting for the remaining 20%. Policies to strengthen domestic demand include import substitution, increasing local content, optimizing government and SOE purchases, and empowering small and medium industries.

“We ensure domestic industrial products remain the mainstay in the local market. Strengthening domestic demand is the anchor for manufacturing growth,” Minister Agus said.

Key subsectors expected to grow in domestic demand include basic metals due to ongoing infrastructure projects, food and beverage industries as a staple sector, and chemical, pharmaceutical, and medical products driven by increasing health awareness.

Exports and Global Market Strategy

Non-oil and gas manufacturing products are projected to contribute 74.85% of total national exports in 2026, as outlined in the Ministry’s 2025–2029 Strategic Plan.

The Ministry plans to achieve this through export market diversification, product competitiveness improvement, and trade cooperation, ensuring Indonesian industry maintains its presence globally.

The sector is also expected to absorb 14.68% of total national employment, with a labor productivity target of Rp126.20 million per worker per year. Total investment in 2026 is projected at Rp852.90 trillion.

Strategic National Industrial Plan (SBIN) Guides Growth

To strengthen the industrial foundation, the Ministry introduced the Strategic National Industrial Plan (SBIN). This framework supports government priorities including food and energy self-sufficiency, industrial strengthening, job creation, and domestic value addition.

“SBIN provides the framework to strengthen the national industrial structure in line with President Prabowo’s agenda for independent, competitive, and sustainable industries,” Minister Agus said.

SBIN emphasizes forward and backward linkages to optimize upstream and downstream sectors, improve supply chain efficiency, and expand workforce absorption. It also supports key programs such as free nutritious meals (MBG) and national health services, ensuring industrial policies directly benefit the economy and society.

PHOTO: FREEPIK

This article was created with AI assistance.

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