19 August 2019 12:01 am
Manufacturing activities picked up in July with increased new orders, signaling a recovery from the Easter attacks.
The manufacturing PMI recorded an index value of 55.7 in July, an increase of 1.8 index points from June.
“This expansion in manufacturing PMI is mainly attributable to the significant increase in new orders and subsequent increase in production, especially in manufacturing of food & beverages sector.
The increase in new orders was mainly due to the gradual recovery of the economy from disruptions related to Easter Sunday attacks,” the Statistics Department of the Central Bank said.
Meanwhile, employment increased at a slower rate during the month of July although many respondents in the textile and apparel industry highlighted that they experienced higher rate of labour turnover during the month.
The stock of purchases increased significantly with the expansion of new orders and production as well as a precautionary measure to face possible disruptions during upcoming election period together with festive season demand.
Further, suppliers’ delivery time lengthened to a neutral level indicating the same delivery time as the previous month, mainly due to the normalization of tight security measures deployed following Easter Sunday attacks.
All sub-indices of the PMI manufacturing, except suppliers’ delivery time which was on neutral level, exceeded the threshold of 50.0 (neutral) signalling an overall expansion in manufacturing activities during the period under review.
The global manufacturing PMI recorded a value of 49.3 in July 2019 with a decline of 0.1 index points from June 2019.
Meanwhile, the services sector continued to expand in July 2019, underpinned by accelerated expansion in new businesses, business activity and expectations for activity compared to June 2019, with an index value of 57.1.
This indicated a further recovery of the services sector after the Easter Sunday attacks.
Business activities of wholesale and retail trade, accommodation, food and beverage, financial services and transportation sub sectors expanded for the second consecutive month in July 2019. Service providers’ optimism on the next three months’ business outlook strengthened to a 29-month high, as expectations for activity expanded across most sub sectors.
However, employment recorded a deterioration compared to previous months as there is a time lag for filling vacant positions and replacement of labour-intensive work by technology.
Meanwhile, respondents in financial services sub sector highlighted that they have reduced lending rates (prices charged) in parallel to the deposit rate reductions.
Global services PMI slightly increased to 52.5 in July 2019 from 51.9 in June 2019, indicating a modest improvement in the rate of expansion in global services sector output, as growth strengthened in US, UK and Italy and returned to expansion in India, Brazil and Russia.
Services PMIs of Japan and China also indicated that their services sectors improved in July compared to June 2019.