In the wake of 11.8 percent contraction of the economy in the third quarter, the country’s manufacturing sector entered the fourth quarter with a downturn continuing In November 2022 as per the Purchasing Managers Index (PMI) of the Central Bank.
The Central Bank has indicated a setback in manufacturing and service sector activities on a month-on-month basis.
Manufacturing sector setback was contributed by subdued performance observed in all the sub-indices, except for Suppliers’ Delivery Time.
New Orders and Production remained contracted in November mainly due to the subdued demand conditions, particularly in the manufacture of the food and beverages, and textile and wearing apparel sectors.
Many respondents representing the food and beverages sector mentioned that deterioration of purchasing power of the consumers was the major reason for the decline in demand.
In the meantime, export-oriented manufacturers, particularly in the textile and apparel sector, highlighted that the subdued demand was due to the economic slowdown in major export destinations and shifting of orders to other countries amidst stiff competition.
Besides these, acquiring required raw materials was an issue for certain manufacturers due to a shortage of foreign exchange.
Furthermore, Employment and Stock of Purchases declined in-line with the decline in New Orders and Production. Meanwhile, Suppliers’ Delivery Time lengthened in November 2022 compared to the previous month.
Expectations for manufacturing activities for the next three months indicated an improvement in November 2022 anticipating improvements in economic conditions.
Services sector recorded a slight increase in November 2022, but , yet remained slightly below the neutral threshold level.
The rate of decline in services activities was softened with the improvements observed in New Businesses, Business Activities and Expectations for Activity. However, Employment and Backlogs of Work declined during the month.
New Businesses improved in November 2022 compared to October 2022, particularly with the increases observed in some financial services, insurance, and other personal activities.
Business Activities in the services sector continued its increasing trend in November 2022 due to the upcoming festive season.
Accordingly, business activities related to other personal activities, financial services and telecommunication sub-sectors showed improvements compared to the previous month. Further, in line with the increase in tourist arrivals, business activities in accommodation, food and beverages sub-sector also increased.
However, business activities related to the wholesale and retail trade sub-sector declined further during the month amid the continued cost of living challenges.
Employment continued to fall in November due to increasing resignations, migrations and retirements though few recruitments took place in several companies. Meanwhile, Backlogs of Work dropped at a faster pace during the month.
Expectations for Business Activities for the next three months improved further especially with the festive season and optimism regarding improvements in economic conditions.
