Manufacturing sector suffers setback in September

Increased availability of imported goods poses challenge

Manufacturing PMI recorded an index value of 45.7 in September 2023, indicating a contraction in manufacturing activities. This setback was contributed by the subdued performance observed in all the sub-indices.

The decrease in New Orders and Production was mainly driven by the manufacture of food & beverages and textiles & wearing apparel sectors. Many manufacturers highlighted the challenging business conditions due to the lacklustre consumer demand and the increased availability of imported goods in the market at competitive prices. Further, the manufacture of textiles & wearing apparel sector continued to contract due to the ongoing sluggish global demand. Moreover, Employment and Stock of Purchases also decreased in line with the decline in New Orders and Production. Meanwhile, Suppliers’ Delivery Time shortened during September compared to the previous month.

However, the outlook for manufacturing activities for the next three months remained positive, mainly due to the anticipated increase in demand in the upcoming festive season.

Services sector PMI recorded an index value of 54.7 in September 2023, indicating an expansion in the services activities at a slower pace compared to the previous month. This was led by the increases observed in New Businesses, Business Activities, Employment and Expectations for Activity. Nevertheless, Backlogs of Works remained contracted during the month. New Businesses increased in September 2023, yet at a slower pace, compared to August 2023, particularly with the increases observed in financial services, wholesale and retail trade, real estate, insurance and education sub-sectors.

Business Activities also expanded in September 2023 showing positive developments in several sub-sectors. Accordingly, business activities in financial services sub-sector improved further attributed to the gradual increase in credit demand inline with declining lending rates. Further, some positive developments were seen in education and transportation sub-sectors during the month. Meanwhile, accommodation, food and beverage subsector also continued to increase, yet at a slower pace, following the slight decline in tourist arrivals observed during the month.

Employment increased compared to the previous month owing to recruitments that took place in several companies, while Backlogs of Work decreased at a higher pace.