- PMI shows manufacturing expanding faster than July as biz readies for upcoming festive demand
Manufacturing activities continued to expand at a higher rate in August 2019, recording an index value of 56.6 which is an increase of 0.9 index points, compared to July 2019 the Purchasing Managers Index (PMI) released by the Central Bank said yesterday, but services expanded at a slower pace last month when compared with July.
This expansion in manufacturing PMI was mainly attributable to the increase in Production and New Orders, especially in manufacturing of food and beverages and textiles and wearing apparel sectors to meet the upcoming festive season demand.
Further, Employment increased, yet at a slower rate, during the month of August especially with the increase in employment in food and beverages sector while, many respondents in the textile and apparel industry highlighted that the labour availability in the market was low.
Meanwhile, the Stock of Purchases expanded at a slower pace in August. Although the New Orders and Production expanded at a higher rate, the stock of purchases was not increased significantly due to accumulated stocks brought forward from previous month. Further, Suppliers’ Delivery Time lengthened at a slightly higher rate, especially from local suppliers.
All sub-indices of PMI Manufacturing, exceeded the threshold of 50.0 (neutral) signalling an overall expansion in manufacturing activities during the period under review.
Services sector continued to expand in August 2019, yet at a slower pace compared to July 2019, recording an index value of 52.9 underpinned by the increases in New Businesses, Business Activity and Expectations for Activity sub-indices.
Expansion in Business Activity in August 2019, was mainly attributable to the accommodation, food and beverage sector owing to the improvement in tourist arrivals. New Businesses also expanded in August 2019, particularly in financial services and transportation sub sectors.
On the employment front, August saw a decline in staffing levels compared to the previous month, due to retirements and time lags in filling vacant positions. Meanwhile, Backlogs of Work sub index continued to remain below 50.0 threshold level implying that any increase in demand could be met with the existing capacity of service providers.
In terms of Expectations for Activity, service providers’ optimism on the three month business outlook eased in August 2019 compared to July 2019.