This report contains the first public release of data collected from the new monthly survey of business conditions in the Myanmar manufacturing sector.
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The survey, sponsored by Nikkei and produced by Markit, has been conducted since December 2015 and provides an early indication of operating conditions at Myanmar manufacturing firms. The headline figure derived from the survey is the Purchasing Managers‟ Index (PMI).
The PMI is a composite index, calculated as a weighted average of five individual sub-components: New Orders (30%), Output (25%), Employment (20%), Suppliers‟ Delivery Times (15%) and Stocks of Purchases (10%). Readings above 50.0 signal an improvement in business conditions on the previous month, while readings below 50.0 show a deterioration.
Operating conditions in Myanmar‟s manufacturing sector deteriorated further in August, as new orders, output and stocks of purchases continued to fall. Moreover, staffing numbers also declined following July‟s stabilisation.
The headline Nikkei Myanmar Manufacturing Purchasing Managers’ IndexT (PMI) posted 47.2 in August, down from 49.2 in July to signal a third successive deterioration in the health of Myanmar‟s manufacturing sector.
Furthermore, the rate of contraction was the most marked since data collection began in December 2015. Central to the decline in sector conditions was a further fall in new order intakes, thereby extending the period of reduction to three months. Moreover, the rate of decrease was the most marked on record.
In line with falling inflows of new business, firms in Myanmar‟s goods-producing sector curtailed production for the fourth consecutive month in August. Furthermore, the rate of decline was the sharpest on record so far, with many survey respondents attributing the drop to severe flooding.
In turn, this led to another sharp decrease in the level of post-production inventories. Faced with weakened client demand, companies decided to reduce their staff numbers in August.
The solid reduction followed no change in the previous month. Despite this, backlogs of work continued to fall in August and at the steepest rate in the series history. ■
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