Talk about Indonesia’s manufacturing sector has started to shift lately. Some say it is losing ground. Others point to declining contributions to the national economy. But the Ministry of Industry sees it differently and is pushing back on that narrative. According to the ministry’s spokesperson, Febri Hendri Antoni Arief, the idea that Indonesia is facing deindustrialization does not reflect what is actually happening on the ground.
“We reject the claim that deindustrialization in Indonesia is happening,” he said at the ministry’s office in Jakarta on May 29, 2026.
He pointed out that many conclusions are drawn from indicators that can be misleading when not read carefully. One of the most common arguments is the drop in manufacturing’s share of gross domestic product. At a glance, that might seem convincing. But the data tells a more nuanced story.
Figures from Badan Pusat Statistik show that in 2025, the manufacturing sector contributed 19.07 percent to national GDP. That number has actually been moving upward in recent years.
The confusion, according to Febri, comes from how the data is compared across different periods.
“If economists or analysts use manufacturing GDP contribution data from 2001 to 2025, those figures are not directly comparable because the concepts, definitions, and calculation methods have changed,” he explained.
The structure behind the numbers has shifted over time. Between 2001 and 2009, GDP was calculated using nine main sectors, with manufacturing as one of them. Starting in 2010, the framework changed. What was once grouped under manufacturing was divided into four separate sectors. These include manufacturing, water supply and waste management, information and communication, and other services.
Read also: Jabodetabek Heat Hits 36°C as BMKG Warns of Health Risks
The way GDP is calculated also changed. Before 2009, it was based on producer prices. From 2010 onward, it uses basic prices. That adjustment alone affects how large or small a sector appears in the data.
“As a result of these changes in concept, definition, and methodology, the value and contribution of manufacturing GDP appear lower compared to previous calculations. Therefore, it is not an apples-to-apples comparison if we compare data before and after 2009,” he said.
When the comparison stays within the same framework, the pattern looks different. Looking at the period from the first quarter of 2022 to the fourth quarter of 2025, the contribution of manufacturing shows a consistent upward trend.
This growth is not happening in isolation. It is supported by several factors. Economic recovery after the pandemic plays a role. So does the government’s downstream industrial policy. Strong domestic consumption also helps keep the sector stable. The downstream approach, in particular, has increased the added value of domestic products.
Another claim often raised is that manufacturing growth is falling behind national economic growth. Febri dismissed this as well. With the overall economy growing at around 5 percent, the manufacturing sector has still managed to grow between 4 and 6 percent.
“So this second indication does not occur,” he said.
There is also the concern about workers leaving manufacturing for other sectors. On this point, the ministry sees no major shift. The manufacturing workforce, which stands at 21.6 million people, has not moved away to sectors like services in any significant way.
In fact, the number of workers in manufacturing continues to increase each year. The rise in service sector employment, he explained, is largely driven by new entrants into the workforce who are not fully absorbed by manufacturing.
“We emphasize that Indonesia’s manufacturing sector is not experiencing early deindustrialization, let alone deindustrialization,” Febri said.
The message from the Ministry of Industry is clear about deindustrialization in Indonesia. The numbers need context. And when that context is taken into account, the picture looks far more stable than the narrative suggests.
