Myanmar’s manufacturing sector stabilized in April, with S&P’s Purchasing Managers Index (PMI) rising to 49.9, just below the 50.0 no change threshold.
Demand has improved, with factories reporting renewed growth in orders and output, following seven consecutive months of contraction.
However, manufacturers report continued material shortages as armed conflict disrupts trading routes, and are relying on holdings from previous months.
Inflationary pressures were also at their strongest level in seven months in April, amid high material and transportation prices, alongside the depreciation of the kyat.
Employment numbers fell for an eleventh successive month in April, with the new conscription law driving the fastest rate of job shedding in 2.5 years as workers migrate back to their hometowns.
Despite these continued challenges, firms surveyed expect to see expansions in production in the coming 12 months, after holding the most pessimistic outlook in history of S&P’s survey in March. Goods producers are said to be hopeful that new product launches will grow sales and expect demand conditions to improve. Nevertheless, optimism remains relatively muted, according to S&P.
Manufacturing exports
According to ministry of commerce data, Myanmar’s manufacturing exports were valued at $8.875bn in FY2023/24 (April-March), down around 19% from the previous financial year.
The drop came after manufacturing exports hit an historically high $10.9bn in FY2022/23 amid a temporary surge in clothing orders following the COVID-19 pandemic.
Manufacturing investment
Domestic investment in the manufacturing sector surged in FY2023/24 to Ks904bn (≈$232m at the actual market exchange rate of around $1 = Ks3,900.), an almost 400% increase from Ks181bn in the prior financial year.
However, foreign investment interest in the sector remains weak at just $152m in FY2023/24, down 44% from $272m in the previous financial year.
Prior to the military takeover, manufacturing had been one of the top sectors for foreign investment, with approval proposals valued at $1.4bn in FY2019/20.
