MMRD BULLETIN
March 19, 2019

Nikkei Myanmar Manufacturing PMI™

 

Output Expansion Accelerates to ten-month high in February

  Key points: ▪ Production growth quickens to fastest since April 2018 ▪ Strong rise in new business ▪ Rate of job creation accelerates to joint-fastest since March 2018   February data signaled a stronger improvement in operating conditions across Myanmar’s manufacturing sector. Rates of expansion in output and new orders accelerated to ten-month highs amid reports of greater client demand. Moreover, employment growth accelerated following a rise in production requirements. Meanwhile, inflationary pressures remained historically muted. Although the rate of cost inflation picked up, it was well below the series trend and output charges were broadly unchanged in February. Despite the faster rise in new business, manufacturing firms expressed a lower degree of optimism, with the level of confidence dipping to a series record low. Output increased for the fourth successive month in February, and the rate of expansion accelerated to a ten-month high. The sharp rise in production was attributed to increased client demand and greater new order book volumes. New business received by manufacturers also rose at a faster pace. The upturn in new orders was the quickest since April 2018 and was commonly linked to greater client demand from across Myanmar’s Nikkei Myanmar Manufacturing PMI Sources: Nikkei, IHS Markit regions. Some also noted that increased activity in the construction sector had driven new business growth. Subsequently, goods producers continued to increase their workforce numbers, with the seasonally adjusted index signalling a third successive monthly rise in employment. Adjusted for seasonal factors, manufacturing firms across Myanmar signaled a further deterioration in vendor performance in February. Output expectations across Myanmar’s manufacturing sector eased slightly in February, with firms registering only a fractional degree of confidence. Moreover, the level of optimism dipped to a series low despite stronger gains in new order volumes during the latest survey period. Comment: Commenting on the Myanmar Manufacturing PMI survey data, Siân Jones, Economist at IHS Markit, which compiles the survey, said: “Myanmar’s manufacturers registered a boost to operating conditions in February, with the PMI reaching a ten-month high. Stronger expansions in output and new orders led to a rise in hiring activity. “Slower rises in raw material prices compared to those seen in 2018 resulted in another subdued rate of cost inflation. That said, factory gate prices were broadly unchanged following a fall in January. “Firms were not, however, buoyed by the improvement in the health of the sector as business expectations dipped to a series record low in February.” Sources: Nikkei, IHS Markit
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