Improvements in new orders and production along with employment recovery

SL Purchasing Managers’ Index – January 2022

Manufacturing PMI improved in January 2022 recording an index value of 58.7 with an increase of 0.6 index points compared to December 2021. This was mainly attributable to the improvements recorded in New Orders, Production together with the recovery in Employment during the month. Further, Stock of Purchases increased while Suppliers’ Delivery Time lengthened on a month-on-month basis.

The expansion in New Orders, Production and Stock of Purchases, particularly in the manufacture of textile & wearing apparel and food & beverage sectors, have mainly contributed to the improvement in the PMI. Although Employment sub-index recovered to positive territory in January 2022, employment sub-index with respect to the manufacture of textile & wearing apparel sector continued to decline, reflecting the difficulty in attracting employees to the sector.

Meanwhile, the Stock of Purchases increased in line with the expansion in New Orders and Production.

The Suppliers’ Delivery Time lengthened at a slower pace in January 2022 on a month-on-month basis. Many respondents stressed that they experienced delays in receiving import consignments, partly due to the impediments in the clearance of shipping documents, opening of letters of credit, and congestions at the port.

In the next three months, the expectations for manufacturing activities remain at elevated levels anticipating continuous improvements in economic condition, locally and globally.