Myanmar's economy remains one of the worst-hit economies in Asia in 2021, according to the HIS Markit Myanmar Manufacturing PMI released on November 1.

"Myanmar's economy remains one of the hardest hit in Asia by 2021. Despite the strong decline at the beginning of the last quarter, there are indications that the rate of decline may be the weakest since the beginning of next year. Firms will hope that global shortages subside, which should reduce prices and stimulate demand growth, though supply pressures are likely to persist into 2022,” said economist Shreeya Patel.

In October, Myanmar's manufacturing PMI stood at 43.3, up from 41.1 last September. However, no significant change was reported, with a significant drop below 50 points.

In October, production inflation hit a five-month high, the second-highest on record.

In addition to the rising costs of raw materials and transportation, a weaker exchange rate has put pressure on production costs. Historically  elevated  price  inflation  for  raw  materials  forced  firms to  raise  their  selling  prices  at  a  near-survey  record  rate, the third-largest increase in survey history.

In addition, Myanmar’s economy was hit by weakened demand, shortage of raw materials and skilled workers in October.

Global  material  shortages  also  contributed  to  the  record  rise  in  backlogs.  Supply  chains  were  disrupted  by  the  pandemic  and  showed  signs  of  deterioration,  with  lead  times  for  inputs  lengthening in October to the third-greatest extent in the series.

Manufacturing conditions have now deteriorated in each month since September 2020, according to the survey.

Five indicators of the Purchasing Manager Index (PMI) are production, new orders, workplace, suppliers' delivery time and stockpiles.

The survey is based on survey data collected from the industries by the HIS Markit and sponsored by Japan-based Nikkei Media Group.