The prices subindex had increased to 44.5 (+5.1) because of an uprise in employment subindex. The new order continued its contractionary phase (42.5, 2.6) because the new local order decreased significantly (Est’d -5.8) which outweighed the increase in new export order (49.4, +3.2). As the new order remained weak, the customers’ inventories (47.4, -0.8) and backlog orders (43.4, +2) stayed in the contractionary phase. The backlog orders increased because the decline in production was lesser than the new order.
The production (48, -0.6) declined because of the weaker outlook. However, the employment improved to 50.6 (+0.2) because the producers preferred to get more workers due to the mismatch in the labour market. The supplier’s delivery improved to 45.6 (-0.5) because of easing in supply and logistic disruption. A lower delivery index means a faster delivery period.
As the new order continued to deteriorate, the producers reduced their inventories to 50.2 (-2.1) and local raw material (Est’d -4.8). However, the producers increased their imports (47.8, +2.7) due to an easing in supply and logistical issues.
In conclusion, the above factors caused the PMI to decline to a 1 year low of 47.4 (-1) and the economy would enter into a recession in 2023.
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