Myanmar manufacturing edges back to growth in August
Its manufacturing PMI rose to 50.3 from 49.3 in July.
Myanmar's manufacturing sector showed tentative signs of recovery in August, as the latest PMI survey pointed to slower declines in both output and new orders, alongside the first rise in purchasing activity in five months.
The headline Myanmar Manufacturing Purchasing Managers' Index (PMI) moved back above the 50.0 no-change mark in August for the first time in four months, rising to 50.3 from 49.3 in July. The reading signalled only a marginal improvement in the sector's health, with suppliers' delivery times and stocks of purchases the only components making a positive contribution.
Both new orders and output fell at softer rates in August, with the pace of decline the weakest in their current four- and five-month sequences respectively. Where declines were reported, manufacturers most often pointed to weak underlying demand, staff illness, material shortages and higher goods prices.
Some firms, however, reported stronger orders and production requirements, whilst others bought ahead of need, together helping to lift input buying for the first time in five months. Though modest, it was the most pronounced increase since mid-2023, and strong enough for firms to build up stocks of inputs for the first time in almost a year.
Firms also raised inventories of finished goods for a fourth consecutive month, with the pace of accumulation the fastest since early 2016.
Delivery times for inputs lengthened again in August, with delays often blamed on raw material scarcity and difficulties securing import licences. Even so, the relevant seasonally adjusted index rose to a one-year high, pointing to an easing of broader supply chain pressure.
Employment growth that began at the start of the second quarter came to an end in August, with manufacturers reporting difficulty retaining staff amidst voluntary resignations. Some firms continued to expand headcount, keeping the overall pace of job losses only fractional.
With labour and material shortages both cited as constraints, backlogs of work rose further, though the pace of accumulation eased markedly to among the weakest in six years.
On prices, cost burdens rose again in August, with input cost inflation ticking up to a three-month high. Charge inflation softened further, however, pointing to only a modest rise in output prices, as some firms passed on higher costs linked to material shortages and an unfavourable exchange rate whilst others offered discounts to help revive demand.
Maryam Baluch, economist at S&P Global Market Intelligence, said the latest results offered some grounds for optimism, with output and new orders declining only marginally and firms increasing purchasing activity for the first time in five months, with some companies also willing to expand their workforces.
She noted, however, that voluntary resignations remained a key driver of staff turnover, leading to a slight net fall in employment in August. Baluch added that firms were also trying to revive demand by absorbing more cost pressure through tighter margins, as input cost inflation intensified even as charge inflation eased, though it remained difficult to say whether these efforts would pay off given most firms held a neutral view of the outlook for output.
