LAHORE: The MCB Bank PMI has recorded moderate growth in manufacturing acti­­vity at 65.69 for July 2015.

According to a press release issued on Tuesday, MCB said the risks to manufacturing sector in Pakistan appear to be nearly balanced.

Low domestic inflation is facilitating access to cheaper raw materials in the local market and declining financing costs are expected to contribute significantly to low mark-up costs and increased profits, the release said.

However, declining commodity prices and stagnating demand in the international market has squelched the penchant and profitability of export production.

Although structural bottlenecks such as energy shortages continue to impede the performance of the manufacturing sector, the results of the 10th MCB PMI portend of promising prospects of performance for the manufacturing sector.

The July 2015 MCB PMI at 65.69 indicates a moderately increasing pace of growth in the manufacturing sector, relative to May 2015, as evidenced by an increase of 0.55 points in the MCB PMI reading.

New orders stood at 76.9, an increase of 0.8 points since May 2015. However, production levels re­­mained stable at 70.6. In­­ef­ficiencies in the supply chain on account of floods may have contributed to the increase in the index monitoring delivery time, which increased to 52.8 from 51.7.

A major shift was seen in the index monitoring prices paid, which decreased by 5 points over the given period; in the period covered by the May 2015 Index, the prices paid index had increased by 8.6 points.

Published in Dawn, August 5th, 2015

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