PMI rises on seasonality with expectations of gloom ahead
Following the seasonal pattern both manufacturing and services had increases in Purchasing Managers Index (PMI). The manufacturing PMI increased on a month-on-month basis to an index value of 57.8,yet at a slower rate than the previous years. This increase was mainly attributable to the improvements observed in Production, New Orders and Employment sub-indices following the seasonal demand.
The increase observed in New Orders and Production sub-indices, particularly in the manufacture of textiles & apparel sector, was due to cover-up arrangements ahead of the seasonal holidays. Though New Orders in the manufacturing food & beverage sector increased in March 2022, catering to the New Year demand, Production and Stock of Purchases related to the same remain subdued, mainly due to supply-side constraints.
Many respondents highlighted that fuel shortage amidst scheduled power-cut disturbed their production plans in many aspects, from material supply to transportation of workers. Suppliers’ Delivery Time also lengthened on a month-on-month basis. Moreover, the Stock of Purchases declined due to the unavailability of required quantities in the domestic market and difficulties in opening letters of credit for importing materials.
The services sector PMI recorded an index value of 51.3 in March 2022 indicating an expansion across the services sector underpinned by the increases observed in New Businesses, Business Activities and Employment sub-indices. New Businesses rose at a higher pace in March 2022 compared to February 2022, particularly with the improvements observed in financial services, other personal activities, telecommunication and insurance sub-sectors.
Following the seasonality, Business Activities continued to grow in March, yet at a slower pace.
Business activities particularly related to wholesale and retail trade, accommodation, food and beverage, human health, and education sub-sectors recorded deterioration during the month. Employment recorded an increase in March due to new recruitments done primarily to meet the seasonal demand. Meanwhile, Backlogs of Work continued to decline at a slower pace during the month. Overall expectations for manufacturing and service activities deteriorated significantly compared to the previous month due to the prevailing uncertain environment in the country.
The global manufacturing PMI recorded a value of 53 in March 2022, with a decrease of 0.7 index points from February. Global services PMI recorded 53.4 in March 2022 from 54 in February 2022 to indicate an expansion in global service activities.