Manufacturing and services activities close 2021 on high note

• Manufacturing activities expand amid New Orders and Production
• Services activities propelled by strong recovery in demand 
• Worries over near future persist amid economic uncertainty and evolving pandemic 

Both manufacturing and services activities recorded expansions in the final month of 2021, the Purchasing Mangers’ Index (PMI) for the month of December showed. 

Manufacturing activities sustained the expansion on a month-on-month basis in December 2021, recording an index value of 58.1 mainly due to the expansion in New Orders and Production. All sub-indices except Employment increased during 
the month. 

The expansion in New Orders and Production was mainly driven by seasonal demand for the food & beverage manufacturing sector.

New Orders and Production in manufacture of textile and wearing apparel sector also showed an improvement, yet at a slower pace.

However, Employment sub-index declined in December compared to November 2021.

The Stock of Purchases increased at a slower pace compared to the increases in New Orders and Production.
Many respondents mentioned that although they wanted to build up stocks significantly ahead of the Chinese new year holidays, they were able to do it only to a certain extent due to import related issues.

Meanwhile, Suppliers’ Delivery Time lengthened at a higher pace in December 2021. Delays due to port congestions, increase in orders ahead of the Chinese new year holidays, shortage of local raw materials were among the major causes of lengthening the Suppliers’ Delivery Time.

In the next three months, expectations for manufacturing activities remain at higher levels anticipating continuous improvements in economic conditions locally and globally.

Meanwhile, the services sector PMI edged up to an index value of 62.4 inDecember marking a strong end to 2021. 

This increase was underpinned by the increases observed in New Businesses, Business Activities, Employment and Expectations for Activity sub-indices.

New Businesses rose further in December compared to the previous month with improvements observed across most of the sub-sectors.

Business Activities in the Services sector indicated a stronger growth in December in line with continued improvements in demand amid the normalisation of economic activities and the festive season.

Accordingly, business activities improved across most of the sub-sectors, where major improvements were observed in financial services, transportation, wholesale and retail trade and other personal activities sub-sectors.
Meanwhile, business activities in accommodation, food and beverage sub-sector also recorded a significant improvement amid the festive season and the considerable growth in international tourist arrivals.

Employment rose further in December as companies continued to expand their workforce owing to the positive developments in business activities. 

Meanwhile, Backlogs of Work continued to decline in December in line with staff reporting to work as usual.
Expectations for Business Activities for the next three months improved further in December supported by the improved perceptions amid expectations on continuity of relaxed pandemic related restrictions.

Nevertheless, some respondents mentioned that the business outlook continues to remain uncertain due to the challenging economic environment amid inflationary pressures stemmed from supply constraints and potential impact of new COVID-19 variants.