Manufacturing sector contracts for third month in a row, index shows

A survey of manufacturing sector activity in Myanmar has showed a contraction in August for the third consecutive month, although the pace of decline remained slight, the Nikkei Asian Review reported on September 1.

The Nikkei Myanmar Manufacturing Purchasing Managers’ Index, or PMI, rose slightly to 49.3 in August from 49.1 in July, the NAR reported.

The index is based on a monthly survey compiled for Nikkei by IHS Markit, with a reading above 50 indicating economic expansion.

A news release said overall manufacturing performance reflected decreased output levels and a fractional fall in new orders. Firms had reported the lowest level of optimism since December 2015, when Nikkei launched the Myanmar Manufacturing PMI.

Input prices had risen at the fastest pace since March because of supplier shortages and transportation problems, the release said.

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It said survey data had also revealed a fractional rise in employment in August, following a moderate contraction the previous month.

Job creation was reported despite backlogs contracting for the fifteenth consecutive month, the release said, adding that although the rate of decline was weaker than that for July, it was faster than the index series average.

“Higher raw material prices were commonly cited as the reason for reduced buying activity and a sharp rise in input prices,” said Mr Sian Jones, an economist at IHS Markit.

“Vendor performance also deteriorated as transportation problems and scarcity of resources began to impact the manufacturing sector,” Jones said.

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