The Purchasing Manager’s Index is a monthly indicator measuring the manufacturing industry, is the index is under the threshold of 50 indicates the industry is contracting and is the index is above the threshold of 50 indicates the industry is expanding. For the month of December, the index fell to 47.6, the first reading under 50 in the past 12 months.
For the month of December, all sub-indexes decreased compared to the previous month, particularly Production which fell to 36.2. Followed by Own Incentory at 34.1 and Clients inventory at 24.1. New Orders (53.4) and Suppliers (67.2) were the only sub-indexes above 50.
For 2921, average of the index was 55.2, a year of expansion for the industry, compared to 2020 at 50.4, and in 2019 at 47.4. The manufacturing industry represents 47% of production on the island, mainly lead by pharmaceuticals. During COVID lockdowns, manufacturing was one of the few industries deemed necessary and were never fully locked down, compared to other states. This helped investment in the industry on the island.
On a yearly basis:
- New Orders averaged 55.8 in 2021, compared to 48.1 in 2020.
- Production averaged 53.9 in 2021, compared to 47.7 in 2020.
- Employment averaged 53.0 in 2021, compared to 47.3 in 2020. Manufacturing, and construction, are the only sectors with employment well above pre-pandemic levels.
- Supplies averaged 66.5 in 2021, compared to 57.0 in 2020. An increase in Supply compared to previous year were the supply chain was hit with global lockdowns.
- Prices paid to averaged 72.4, compared to 55.8 in 2020. This increase in prices at the manufacturing level is part of the supply chain crisis.
- Backlog averaged 44.2 in 2021, compared to 35.9 in 2020. December was the only month with an index above 50 since March 2020. The supply chain crisis is still affecting and this will continue to increase prices to consumers along the chain.
The index has been above the 50 threshold for 83 of 140 months, 59% of readings, meaning the manufacturing sector has expanded on a monthly basis 59% in the past 11+ years.
The PMI is based on the answers to questionnaires sent to industry professionals.
