Factory activity slide eases in May

The PMI rose from April's 11-year low of 36.0 to 39.2 in May

The PMI rose from April's 11-year low of 36.0 to 39.2 in May

"Some firms noted that an easing of lockdown measures had helped mitigate the downturn in May, alongside efforts to boost online business operations", he said. Vietnam, Malaysia and the Philippines saw PMIs rebound from April, though the indices all remained below the 50-mark threshold that separates contraction from expansion.

"Given the stringency of the lockdown measures imposed in India, it is no surprise to see the severity of the declines in April and May", said Joe Hayes, economist at IHS Markit.

The survey's Future Output Index rose narrowly into positive territory for the first time since February as 38pc of firms now expect output to grow again within 12 months.

The services headline figure for May came in at 29, up from 13.4 in April but still marking the second fastest rate of declining activity since the survey began in 1996.

The AIB Manufacturing Purchasing Managers' Index (PMI) for May shows that although many indicators recovered some of the ground lost in April's collapse, they still signalled rapid falls.

Firms reported weaker sales here and overseas due to the lockdown, forcing companies to cut back buying activities and reduce inventories.

Plunging cost of wind, solar marks turning point in energy transition
Next year, up to 1,200 GW of existing coal capacity could prove more expensive to operate than the cost of building new utility-scale solar PV farms, the report found.

IHS Markit said it saw improvement on the "degree of sentiment regarding output in a year's time" as firms were encouraged on partial lifting of lockdown and cases of coronavirus disease 2019 (COVID-19) "being kept under control".

On the price front, cost burdens rose only slightly during May, with the rate of inflation unchanged from April. On the back of low expectations on demand conditions, firms have cut back production, which forced manufacturers to severely cut down worker numbers in May.

Meanwhile, Capital Economics said in a note that conditions in the manufacturing sector "worsened from April to May" as readings were below 50. "And things are likely to continue improving very gradually over the coming months as external demand recovers", analysts at the consultancy wrote.

"While PMI readings are unusually hard to interpret this month, the bigger picture remains the same - the region's manufacturing sector is in a deep recession".

The country's manufacturing sector activity recorded another sharp deterioration in business conditions during May as new orders placed with producers continued to fall after April's record contraction, leading firms to cut jobs at the quickest pace on record, a monthly survey said on Monday.

Output levels in the Arab world's third largest economy continued to contract midway through the second quarter, although the rate of decline eased considerably from April when businesses were mainly shut.

Recommended News

We are pleased to provide this opportunity to share information, experiences and observations about what's in the news.
Some of the comments may be reprinted elsewhere in the site or in the newspaper.
Thank you for taking the time to offer your thoughts.