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Services picked up to a 16-month high in November and Manufacturing also improved as optimism from the Presidential Elections and stimulus package prompted businesses to take an optimistic approach to growth, the Purchasing Managers Index (PMI) released by the Central Bank revealed yesterday.
Services PMI reached a 16-month high to 57.4 index points in November 2019, supported by expansion in New Businesses, Business Activity and Expectations for Activity.
The strongest growth was observed in Expectations for Activity, which posted the highest index value since June 2015.
“Respondents cited that they expect greater stability on the political front, while being positive on their business growth, underpinned by new tax revisions.
Further, the upcoming peak season for tourism, the festive season and the holiday season are expected to contribute favourably towards their businesses during the period ahead,” the statement said.
New Businesses increased, yet at a slower rate compared to the previous month, while Business Activities increased along with new technology-based expansions. The increase in Business Activities was notable in the Accommodation and Financial Services sectors.
Despite the increase in employment in sectors such as Accommodation, Wholesale/Retail Trade and Personal Services, the index on employment of the Services sector continued to remain below the 50-threshold level for the eighth consecutive month.
Backlogs of Work also decreased in November, compared to October 2019.
Manufacturing PMI expanded in November 2019, recording an index value of 56.0 mainly due to the expansion in New Orders, Production and Employment.
All the sub-indices indicated an expansion, yet at a slower pace compared to October 2019. New Orders and Production expanded at a slower rate mainly due to the slowdown in manufacturing of textile and wearing of apparel. Employment slowed down marginally in line with these developments.
Although New Orders and Production expanded at a slower pace, the Stock of purchases expanded at a higher rate due to intended accumulation of stocks to fulfil the future requirements anticipating supply delays due to the upcoming Christmas and New Year holidays.
Further, Suppliers’ Delivery Time reached a neutral level, indicating that it remains the same as in the previous month.
All sub-indices of PMI Manufacturing, except Suppliers’ Delivery Time which was at a neutral level, exceeded the threshold of 50.0 (neutral), signalling an overall expansion in manufacturing activities during November 2019.
