Manufacturing PMI declined significantly in April 2022, following the seasonal pattern and indicating a contraction in manufacturing activities on a month-on-month basis.
Accordingly, Manufacturing PMI recorded an index value of 36.4 in April 2022, with a decline of 21.4 index points from the previous month.
This was due to the significant decreases reported in production, new orders, stock of purchases, and employment subindices compared to the seasonal peak in month of March.
The decline in production, particularly observed in the manufacture of food & beverage and textiles & apparel sectors, was due to fewer working days during the month owing to new year holidays, and supply-side constraints including ongoing power outages/energy shortage.
Decrease in New Orders, especially witness in the manufacture of food & beverage sector, was due to end of the festive season demand. Employment also dropped on a month-on-month basis with the increase of absentees following the new year holidays.
Further, stock of purchases declined mainly due to the unavailability of required quantities in the domestic market and difficulties in opening letters of credit for importing materials.
Many respondents highlighted that they had to slow down production due to the unavailability of required raw materials.
Meanwhile, suppliers' delivery time lengthened at a higher pace in April 2022, mainly on account of international logistical issues, clearance delays due to forex payment issues, and diesel shortage.
As the manufacturers are concerned about the growing uncertainties from multiple fronts, the overall expectations for manufacturing activities for the next three months deteriorated further in April 2022.