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August 11, 2020

Manufacturing sector on growth trajectory to encourage economic recovery

“Myanmar’s manufacturing sector showed signs of recovery in June despite COVID-19 according to PMITM survey from IHS Markit. Output & new orders increased for first time four months. IHS Markit’s Myanmar Manufacturing PMI is a composite indicator of manufacturing performance.”
Union Minister for Investment and Foreign Economic Relations U Thaung Tun sent this message on the social media platform Twitter on 2 July.
Myanmar’s manufacturing sector suffered from a huge slump between February to May, reaching nation 29 on IHS Markit’s PMI in April and 38.9 in May. IHS Markit is a London-based global market and industrial sector information provider that collects information, performs research, and provides technical solutions.
These numbers are the second lowest recorded on the PMI since the survey began in December 2015. However, the numbers rose to 48.9 for June. Myanmar averages a little above 50 on the index and remained between 50 to 55 in all of 2019.
Trevor Balchin, Director of Economic Indices at IHS Markit, said Myanmar’s manufacturing sector took a catastrophic plunge in May and this can be attributed to travel restrictions and temporary closure of businesses.
Job layoffs in May also reached new records. Unemployment issue is the most serious problem in the world and in Myanmar as well.
Foreign investor interest in Myanmar’s garment manufacturing sector is still strong despite a fall in the volume of garment exports in 2019-2020 fiscal year.
Of the 178 foreign enterprises endorsed by the Myanmar Investment Commission (MIC) and permitted to invest in Myanmar between October 1 last year and 31 May this year, more than three quarters channelled capital into the manufacturing sector, according to the Directorate of Investment and Company Administration (DICA).
The MIC is giving priority to investments in garment manufacturing going forward as these are labour intensive industries likely to create a large number of jobs in efforts to alleviate the impacts from the COVID-19.
Myanmar is in the uptrend of foreign investment, and more capitals will flow into the country in the post COVID-19 period; the volume of investment could reach $5.8 billion, the expected target in this year. Manufacturers that are able to produce face masks and other personal protective equipment related to COVID-19 will also be given priority.
Enquiries from investors are still flowing in even though garment exports fell to a mere $2.7 billion between 1 October, 2019, and 31 May, 2020, representing a $24 million decline from the same period a year before due to order cancellations from the European Union.
In this situation with signs of recovery, the authorities are obliged to create job opportunities as soon as possible and businesses should also be flexible in moving forward and tracking how coronavirus has affected their business on a regular basis.

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