The prices subindex had declined to 51.7 (-0.8) because of an easing in supply and logistic disruption. However, this might change as the recent freight cost had risen again. The new order had entered a contractionary phase (47.1, -4.2) because the new export (47.8, -1.6) and local orders (Est’d -2.5) had declined respectively. This phenomenon caused the customers’ inventories to rise to 41.6 (+2.7) because of slower depletion and also decreased the backlog orders to 50.9 (-2.1).
The production remained relatively stable at 50.6 (+0.2) because of declines in orders but employment had fallen to 48.7 (-5.5). This employment reduction showed that the producers were getting pessimistic. The supplier’s delivery had improved to 52.4 (-2.7) because of easing in supply and logistic disruption. A lower delivery index means a faster delivery period.
Nevertheless, the producers took advantage of the lower prices to stock up on their inventories (55.5, +2.4) and increased their imports (52.6, +0.1) and raw materials (Est’d +2.3)
In conclusion, the above factors caused the PMI to decline to a 1 year low of 50.9 (-1.9) and look set to enter a contractionary phase.
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