The prices had accelerated again to 89.6(+4) because of the persistent high freight costs, container shortages and rising material prices which still maintained the supplier’s deliveries at a high level of 75 as a higher number indicated slower deliveries. Simultaneously, these factors impacted inventories (45.6, -4.3) and import (52.2, - 4.5) too.
Consequently, the producers were left with no choice but to reduce their production (62.5, -5.6) and employment (55.1, -4.5). The customers’ inventories (28.4, - 1.5) continued to be depleted as the producers fulfilled fewer new orders (64.3, -3.7) which were caused by a decline in new local order (-4.1) because of rising prices. This denoted higher inflation which was present and caused consumers to rein in their spendings.
The backlog of order continued to trend higher (68.2, +0.7) because the producers couldn’t fulfill all the orders in time. Therefore, all these caused the PMI to decline to 60.7 (-4). This latest PMI was not a cause of concern yet as the customers’ inventories were extremely low but another month of declining PMI would indicate that the recovery would be weakening due to higher inflation.
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