Manufacturing, services sectors show recovery in June: PMI

Wednesday, 17 July 2019 00:00 -     - {{hitsCtrl.values.hits}}

Services and Manufacturing activities recovered from the Easter Sunday attacks and expanded at a higher rate in June, as per the Central Bank compiled Purchasing Managers' Index (PMI).

Manufacturing activities expanded at a higher rate in June 2019, recording an index value of 53.9 which is an increase of 3.2 index points, compared to May 2019.

Central Bank said this expansion in manufacturing PMI is mainly attributable to the significant recovery in Employment, especially, in manufacturing of food and beverages and textiles and wearing apparels sectors, from the lower employment availability experienced after the Easter Sunday attacks. 

Expansion in New Orders and Production, particularly in manufacturing of food and beverages sector, also contributed to the improvement of PMI in June. Many respondents also highlighted that New Orders and Production recovered to a greater extent in June with the normalization of economic activities after the disruptions caused by the Easter Sunday attacks.

The Stock of Purchases increased considerably with the expansion of New Orders and Production. Further, Suppliers' Delivery Time lengthened at a slower rate as a combined outcome of increased demand for supplies of input and the gradual easing of the tight security measures deployed.

All sub-indices of PMI Manufacturing exceeded the neutral 50.0 threshold signalling an overall expansion in manufacturing activities during the period under review. 

Services sector recovered in June 2019 from its lowest level recorded in May 2019, which was mainly caused by the Easter Sunday attack. The recovery in Services activities is mainly attributable to expansion in New Businesses and Business Activity, and Expectations for Activity.

New Business activities of Wholesale and retail trade, and Transportation sub sectors, which deteriorated after the Easter Sunday attack, expanded in June 2019. Further, respondents in accommodation, food and beverage, and other personal services sub sectors, which largely depended on tourist arrivals in the country highlighted that Business Activities were gradually picking up.

Expectations for Activity were also increased in June after declining for two consecutive months. However, Employment recorded a deterioration compared to previous month, yet at a slower pace, due to delays in filling vacant positions.

Prices Charged in the Services sector declined in June due to price discounts offered by hotels and price reductions offered by firms in Transportation sub sector to face the competitiveness in the industry. Meanwhile, Expected Labour Cost for next three months increased at a slower pace in June.