Production and new orders continue to fall in Myanmar’s manufacturing sector, with kyat-denominated exchange rate speculation against the dollar and prices continue to rise due to scarcity of raw materials and rising shipping costs, according to the Nikkei Myanmar Manufacturing PMI for June 2021 (Manufacturing Purchasing Manager’s Index). Many factories and customers’ businesses were closed, leading to a decline in jobs and purchases. During this period, the kyat was devalued against the dollar. Respondents often pointed out that prices continued to rise due to scarcity of raw materials and rising shipping costs.
The single IHS Markit Myanmar Manufacturing PMI, the only key indicator of productivity, rose from 39.7 in May to 41.5 in June, indicating a tenth consecutive month of decline in manufacturing conditions. Productivity by local producers in Myanmar fell further in June, but at a weaker rate. At the end of the second quarter, domestic demand remained weak and new orders fell sharply. The decline has been linked to a shortage of cash and a rise in prices. Overall, the current decline is one of the highest in the survey’s five-and-a-half-year history.
The workforce continued to decline sharply, with respondents pointing to workers returning to their hometowns. Despite the weakening of demand, raw material shortages and factory closures led to a sharp rise in backlog in June. In terms of prices, inflation in production costs rose, but weakened from a record high in May. Respondents said the exchange rate was deteriorating; They continue to point to shortages of raw materials and rising transportation costs. Companies reported shifting part of the initial cost burden, and the inflation rate for selling prices was the second highest in the survey so far. The survey is based on original data collected from industry by IHS Markit and supported by the Japan-based Nikkei Media Group.
Source: Daily Eleven