Purchasing Managers’ Indices for both Manufacturing and Services activities indicated a subdued performance in May 2022. Manufacturing PMI recorded an index value of 50.3 in May 2022, with an increase of 13.9 index points from the seasonally low value in the month of April.
The slight edging up of the PMI was mainly due to the recovery of employment and the lengthening of suppliers’ delivery time. Even though the lengthening of suppliers’ delivery time generally reflects the expansion in the manufacturing activities, in this instance it was primarily due to supply side impediments arising from clearance delays of imported goods and fuel shortage. Moreover, employment edged up during the month, particularly in the manufacture of textiles & apparel sector, partly due to cross-industry employee movements. The subdued performance in production and new orders were particularly witnessed in the manufacture of food & beverage sector. The contraction in the new orders was partly due to the ending of the festive month.
Production process of the manufacturing sector has been severely hit by numerous supply-side constraints, including a shortage of materials and the ongoing power outages.
Further, the stock of purchases declined mainly due to the unavailability of required quantities in the domestic market and difficulties in opening letters of credit for importing materials, forcing many producers to significantly slow down their production. For the next three months, the overall expectations for manufacturing activities continued to deteriorate compared to the previous month due to the prevailing uncertain economic environment in the country. Services PMI dropped marginally to an index value of 42.4 in May 2022 indicating a contraction in services activities for the second consecutive month.
This was due to the declines in New Businesses, Business Activities, Employment and Expectations for Activity sub-indices. New businesses declined further in May 2022 compared to April 2022, particularly with the decreases observed in accommodation, food and beverage, wholesale and retail trade, real estate, and education sub-sectors.
Employment continued to decline in May due to terminations in line with the decline in business activities, retirements and resignations. Expectations for business activities for the next three months deteriorated further in May due to supply-side constraints, inflationary pressure, and economic and political uncertainties in the country.
Meanwhile the global manufacturing PMI recorded a value of 52.4 in May 2022, with an increase of 0.1 index points from April. Global services PMI posted 52.2 in May 2022 unchanged from April 2022 to indicate an expansion in global services activities.
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