Rising output and new orders boosted the Indonesian manufacturing sector in January, according to S&P Global on Monday.

The headline Indonesia manufacturing purchasing managers index logged at 52.6 in January, up from 51.2 in December, and striking further above the 50-mark that separates growth from contraction, reported S&P Global, citing its monthly survey.

January marked the sixth successive month of strengthening conditions in Indonesia's manufacturing sector, as factory managers "often attributed the increase to firmer market demand, which raised requests for goods," reported SP Global.

Nevertheless, the global market for Indonesian products was still tepid in January. "Demand conditions appeared to be driven by the domestic economy, as there was a fall in international sales for the fifth month in a row amid reports that tariffs had weighed on overseas demand," said S&P Global.

To meet demand, Indonesian manufacturing managers increased purchases of inputs for the sixth month in a row in January, although job rolls again decreased in the factory sector.

There was "pressure on capacity exacerbated by a renewed reduction in employment," noted S&P Global.

As expected in a period of rising output, Indonesian manufacturers reported input costs were rising due to an increase in raw material prices, and that lead times for inputs increased in January.

Despite some input-cost inflation and other production hurdles, Indonesian factory managers were optimistic about the year ahead.

"Firms were confident that the firmer demand conditions seen at the start of 2026 would continue over the remainder of the year, as backlogs of work---a bellwether for near-term activity---rose for the third consecutive month," reported S&P Global.

Indonesian manufacturers can expect another promising year if recent official economic growth forecasts are on target.

Indonesia's economic growth in 2025 is estimated to have reached the government's target of 5.2%, and the government is maintaining its 2026 economic growth target of 5.4%, Finance Minister Purbaya Yudhi Sadewa said last week, reported Business Indonesia.

The January Indonesia manufacturing PMI was compiled by S&P Global from surveys received from 400 manufacturers from January 12-23.