LAHORE: Economic activity in the manufacturing sector expanded in November at a slightly slower pace than in September, according to company executives surveyed in the MCB Bank’s Purchasing Managers Index (PMI).
The PMI for November registered a value of 63.25 compared to 64.76 in September, said a press release on Thursday.
At present, risks to the manufacturing sector appear to be finely balanced with large-scale manufacturing (LSM) increasing on a year-on-year basis. The sector posted a growth of 3.88pc during July-Sept 2015, according to Pakistan Bureau of Statistics (PBS).
An expected increase in credit uptake with interest rates currently at 42-year low will help manufacturers going forward and boost overall economic growth.
However, at the same time, declining commodity prices and stagnant demand in the international market remain a concern for profitability of exports. During July-Oct 2015, exports fell 13.48pc year-on-year in dollar terms, according to the PBS.
The PMI for November indicates that manufacturing activity continued to grow for the 12th consecutive reading, although its pace slowed down as compared to September. New orders increased at a slow pace in November, registering an index value of 70.6, compared to 75.3 in September, while production level dropped 0.3 percentage points (pps) to 67.2. With sales and production levels both rising, but at a decreasing rate, finished inventories followed a similar trend from September’s reading of 64.7 to 61.7.
Meanwhile, supplier deliveries were slower at 53.3 as evidenced by a 1.1 pps increase. A reading of below 50 indicates faster deliveries and a potential cooling down of the economy and vice versa.
Employment in the manufacturing sector also continued to grow further, registering a value of 55.6. The CPI (Consumer Price Index) inflation bottomed out in September at 1.32pc, but has since picked up in two consecutive months (October and November) at 1.61pc and 2.73pc respectively, according to the PBS. The readings for both the indices were registered at 60.8, showing an increase of 5.2 points.