The prices subindex had declined to 39.4 (-03.6) because of the continual easing in supply and logistic disruption. The new order continued its contractionary phase (45.2, -2) because the new export (46.2, -2.2) order declined and the new local order remained stagnant. As the new order remained weak, the customers’ inventories (48.2, -0.5) and backlog orders (41.4, +1.4) stayed in the contractionary phase.
The production (48.5, -3) declined because of the weaker outlook. However, the employment improved to 51.4 (+3) because the producers preferred to get more workers due to the mismatch in the labour market. The supplier’s delivery improved to 45.1 (-2.1) 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 (51.8, +0.9) by using more local raw materials (+2.4) and reducing their imports (45.1, -1.5)
In conclusion, the above factors caused the PMI to decline to a 1 year low of 48.4 (-0.6) and the economy would enter into a recession in 2023.
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