Manufacturing sector subdued, services inch up in August

The country’s manufacturing sector remained subdued and the services sector managed to inch up in August as per the Purchasing Managers Index (PMI) released by the Central Bank.

The bank said the Manufacturing Sector PMI recorded 54.4 in August, which is a slight increase of 0.1 index points compared to July 2017. The increase was driven by the increase in the stock of the purchases sub-index due to slow progress in production activities during the month and maintaining buffer stocks to cater to the already received new orders to be supplied in the future. Suppliers’ Delivery Time lengthened mainly due to some company-specific constraints. 

The Employment sub-index contracted due to the difficulties in finding unskilled employees in the market to address high labour turnover, especially in the apparel sector. However, all the sub-indices apart from the Employment sub-index of PMI recorded values above the neutral 50.0 threshold, signalling an overall expansion in August. Moreover, there is expectation for activities to remain positive for the next three months.

Services Sector PMI recorded 60.1 index points in August from 59.1 index points in July 2017. This indicates that the Services sector continued to expand in August 2017 compared to July 2017 driven by New Businesses, Business Activity and Expectations for Activity. 

Employment Level increased at a slower rate while Backlogs of Work declined in August 2017 compared to July 2017. The Financial and Telecommunication sectors contributed to expansion in New Businesses and Business Activity through the introduction/expansion of technological reach to serve their clients and to improve efficiency of their services. 

The Accommodation, Food and Beverage sector also reported an increase in Business Activity. The Prices Charged sub-index experienced an increase, mainly in the Accommodation, Food and Beverage sector due to seasonal demand. Meanwhile, the Expectations on Labour Cost sub-index continued to decline in August 2017.