Data published by Jibun Bank showed that activity in the manufacturing sector improved in August, but continued to contract (for the third month in a row), which was caused by higher oil prices and uncertainty about the prospects for the global economy.
Manufacturing PMI rose to 49.7 points from 49.6 points in July. Economists had expected the index to remain unchanged. An index value below 50 points indicates a reduction in activity in the sector. Output, new orders and exports all continued to decline, while employment was unchanged, ending a 28-month sequence of job creation. Input prices increased at the fastest pace in three months, with a number of firms reporting higher costs for crude oil.
Meanwhile, the services PMI rose to a three-month high in August - to 54.3 points compared to 53.8 points in July. The improvement in the index was driven by a strong increase in new orders as well as an increase in new export orders.
Jibun Bank also said that the composite PMI -- which combines both manufacturing and service sector activity -- rose to 52.6 points from 52.2 points in July. This was the eighth straight month of expansion in private sector activity and the steepest pace in three months. The data also pointed to a decline in business confidence amid concerns about long-term economic conditions.