There was a strong revival in manufacturing goods in the country. The manufacturing PMI reached a nine-month high at 67.0 last month. This was largely attributable to the increases in production, new orders, and stock of purchases sub-indices.
The significant increases in New Orders and Production sub indices, particularly in the manufacture of food and beverages and textile and wearing apparel sectors, have mainly contributed to the improvement in the overall index. Many respondents in the manufacture of food and beverages sector highlighted that they experienced higher levels of sales and production during March 2021 ahead of the New Year festival season. Respondents from the textile and wearing apparel sector said that they increased production during the month to cover-up seasonal holidays.
Meanwhile, the Stock of Purchases sub-index increased in line with the expansion in New Orders and Production. Employment sub-index also expanded at a higher rate. The Suppliers’ Delivery Time sub-index lengthened at a slower pace during the month. Many respondents highlighted that some easing in suppliers’ delivery time was experienced with the gradual resolvement in shipping related issues.
However, freight rates remain at elevated levels, increasing the cost of raw materials, which in turn adversely affected their profit margins. Expectations for manufacturing activities in the next three months remained at improved levels anticipating a further improvement in economic activities within the country as well as in major export markets. Services PMI rose to 62.1 in March 2021, indicating an expansion of the services sector for the fourth straight month.
This increase was underpinned by the expansions observed in new businesses, business activities, employment and expectations for activity.
New businesses in the services sector increased in March 2021, particularly with the improvements observed in financial services, other personal services, and wholesale and retail trade sub-sectors. For the fourth straight month, the business activities in the services sector increased in March 2021 with increases observed almost across all sub-sectors.
The financial services sub-sector recorded a further improvement during the month in line with the progresses in economic activities. With the festive season, wholesale and retail trade, and transportation sub-sectors also expanded further.
Other personal services sub-sector also experienced an increase in March 2021. Meanwhile, education sub-sector continued to expand amid the increased demand for higher education following GCE Ordinary and Advanced Level examinations. Employment increased in March 2021 for the first time after declining for 13 consecutive months due to new recruitments amidst growing business activities.
Backlogs of work decreased in March 2021 for the second month in row in line with the increase in staffing levels, which were previously at a low level due to Covid-19 related health concerns.