Portugal: Deterioration in manufacturing conditions eases but remains severe in May
The IHS Markit manufacturing Purchasing Managers’ Index (PMI) bounced back from April’s record-low of 31.9 to 40.6 in May, but was still weighed on by protracted lockdown measures. Therefore, the index was stuck below the crucial 50-threshold, indicating worsening conditions in the manufacturing sector, where it has been for over one year.
The improvement in the headline PMI came on the back of softer declines in output, new orders and employment. That said, all sub-indexes registered steep paces of contraction, with the drop in new orders the second-fastest in the history of the survey. Moreover, exports continued to fall amid muted international demand from countries experiencing similar lockdowns. As a consequence, manufacturers reduced their staff numbers at the third-quickest pace on record. On the price front, input costs rose sharply due to recent weakness of the zloty against the euro; meanwhile, firms continued to cut their output prices in a bid to attract clients. Meanwhile, businesses sentiment in May remained roughly unchanged.