Manufacturing activities contracted during May due to adverse impacts of the third wave of COVID-19 pandemic. The manufacturing PMI recorded an index value of 42.1 in May 2021 with a fall of 2.2 index points from the previous month, mainly driven by the significant contraction in Production, Employment, New Orders and Stock of Purchases sub-indices.
Production, especially in the manufacture of food & beverages and textiles & wearing apparel sectors, declined significantly together with the decline of Employment mainly due to the continued increase in absence without informing. On top of this, many respondents in those sectors highlighted that their production plans were largely disrupted due to a significant reduction of availability of employees amidst the mobility restrictions imposed in mid-May.
Business activities in the services sector saw a sharper decline in May 2021.
The New Orders also declined during the month, especially in the manufacture of food & beverages sector, with the end of seasonal demand and the resurgence of the pandemic. In line with these developments and the deterioration in accumulated stocks of raw material, the Stock of Purchases contracted.
Wholesale and retail trade, other personal activities and accommodation, food and beverage, and professional services sub-sectors contributed the most towards the decline in overall business activities. Nevertheless, business activities in human health activities, and IT programming consultancy and related activities sub-sectors remained at the same level as in the previous month. In line with the escalation of the third wave of COVID-19 pandemic, Services PMI dropped further to 39.5 in May 2021, recording the lowest reading since April 2020. This decline was underpinned by the deteriorations observed in new businesses, business activities, employment and expectations for activity.
Employment continued to decline in May 2021 due to retirements, resignations and contract expirations amid the absence of new recruitments.
Meanwhile the global manufacturing PMI recorded a value of 56.0 in May 2021 with an increase of 0.2 index points from April 2021. Global services PMI increased to 59.4 in May 2021 from 57.0 in April 2021, signaling a further expansion of global service activities.
0 comments: