Manufacturing PMI expanded at a slower pace in January 2020 recording an index value of 54.0 mainly due to the slower expansion in New Orders and Stock of Purchases.
New Orders, Production and Stock of Purchases sub-indices expanded at a slower pace particularly in the manufacturing of food and beverages sector with the decreasing demand after the festival season. Further, a slowdown in Stock of Purchases in textile & wearing apparel sector could be observed due to Chinese New Year holidays. The Employment contracted during the month due to the leaving of employees from their jobs for better paid employments.
Meanwhile, a significant lengthening of Suppliers’ Delivery Time was experienced, especially in manufacturing of textile and wearing apparel sector. Although, lengthening of Suppliers’ Delivery Time usually indicates higher demand for materials with the expanding manufacturing activities, the New Coronavirus (COVID-19) outbreak in China since early January 2020 has mainly caused this delay. Further, many respondents in this sector highlighted that their import orders for materials from China have been delayed indefinitely due to the same reason.
All sub-indices of PMI Manufacturing, except Employment, exceeded the threshold of 50.0 (neutral) signalling an overall expansion in manufacturing activities during the month of January 2020.
Although the manufactures, especially related to appeal sector, cautioned that New Coronavirus outbreak would disrupt the global supply chain, overall expectations for manufacturing activities for the next three months remain slightly improved compared to last month.