Myanmar factory downturn eases in July as PMI rises to 49.3
This signaled only a slight worsening in operating conditions.
Myanmar’s manufacturing sector contracted for a third straight month in July, though the downturn softened as declines in new orders and output eased, according to the latest S&P Global survey.
The headline Myanmar Manufacturing PMI rose to 49.3 in July from 47.4 in June, signalling only a slight worsening in operating conditions.
New orders and output both continued to fall, weighed down by weak underlying demand and material shortages, though the rate of contraction slowed in both cases.
Reduced output requirements led firms to trim purchasing too, with buying activity declining at its weakest pace in the current four-month run of contraction, as material scarcity and continued reliance on existing stocks were cited as factors.
Manufacturers drew on stocks of purchases for a tenth consecutive month, while finished goods inventories held broadly steady after two months of marginal build-up.
Vendor performance worsened markedly, with input lead times lengthening to their greatest extent in three months, again blamed largely on material shortages.
Despite the weak backdrop, employment rose for a fourth straight month, though only slightly. Input cost inflation picked up for the first time in three months, driven by material shortages and higher transport costs, whilst output charge inflation held broadly steady as some firms passed costs on and others chose to absorb them or run promotions to protect sales.
Business confidence remained close to neutral, with the sector’s lacklustre performance expected to persist over the coming year.
Maryam Baluch, economist at S&P Global Market Intelligence, said Myanmar’s manufacturing sector had continued to deteriorate at the start of the second half of the year amid persistently weak demand and ongoing supply-side challenges, with new orders falling again and prompting firms to cut output further.
She noted that sourcing materials remained a key constraint for firms that did raise production, that supply chains stayed tight and cost burdens intensified, forcing manufacturers to draw down existing stocks, and that the modest employment gains of the previous two months appeared to be losing momentum, with confidence in the sector remaining close to neutral.
