Headline Inflation, as measured by the change in the National Consumer Price Index (NCPI, 2013=100), which is compiled by the Department of Census and Statistics (DCS), increased to 2.5 per cent in June 2018 from 2.1 per cent in May 2018, on year-on-year basis, mainly driven by monthly increase in the prices of items in the Food category. The change in the NCPI measured on an annual average basis decreased from 5.7 per cent in May 2018 to 5.3 per cent in June 2018.

When monthly change is considered, the NCPI increased from 124.3 index points in May 2018 to 126.5 index points in June 2018 largely due to the increase in prices of the items in the Food category, particularly that of vegetables, fresh fish, green chillies, and potatoes. Meanwhile, within the Non-food category, prominent price increase was observed in Transport category mainly due to the upward administered price revisions to petrol, diesel and bus fare.

The Manufacturing Sector PMI decreased to 57.6 index points in June 2018 from 60.6 index points observed in the previous month and was in line with the pattern observed in the previous years. The significant drop in Production especially that of manufacturing of food, beverages and tobacco products largely contributed for this decrease. Further, New Orders and Stock of Purchases also decreased during the month. However, the overall Employment increased with the new recruitments in manufacturing of textiles, wearing apparel, leather and other related products. Meanwhile, the time taken by the suppliers to deliver materials increased due to unfavourable weather conditions prevailed during the month and the tightened environmental regulations in China. As a result, the Suppliers’ Delivery Time lengthened. Overall, all the sub-indices of PMI recorded values above the neutral 50.0 threshold in June 2018 signalling an overall expansion in manufacturing activities yet at a slower phase compared to May 2018.