The latest IHS Markit Myanmar Manufacturing PMI for the month of December paints a contrasted picture of the sector, going up to 44.7 in December 2020 from 43.2 a month earlier, the fourth straight month of contraction in factory activity but the softest in the sequence.

Key findings show output and new orders contracting sharply amid ongoing restrictions, a record rise in outstanding work, as well as the sharpest decline in workforce numbers since June.

Shreeya Patel, economist at IHS Markit, commented: “latest data shows encouraging signs for Myanmar’s manufacturing sector, with softer contractions in output and new orders in December. Despite ongoing restrictions in key regions such as Yangon, latest data points to a movement towards stability. That said, business closures and muted demand conditions are not sustainable for firms in the long-term. Respondents reported further job shedding while purchasing activity remained historically weak. At the same time, material shortages added to price pressures at the end of 2020.”

Business confidence remained in positive territory in December, improving to its highest level since June. Planned business expansions, new product launches and hopes of recovering client demand contributed to optimism.