The Philippine manufacturing sector showed signs of a slowdown in May 2024, according to a survey by S&P Global.
The headline S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) fell to 51.9 in May from a five-month high of 52.2 in April. A reading above 50.0 indicates continued expansion.
“The Filipino manufacturing sector continued to report further gains mid-way through the second quarter, with growth sustained in new orders and output. Further expansions in business requirements supported a rise in purchasing activity and inventories,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
“However, firms struggled to maintain their workforce numbers with job shedding noted for the first time in five months,” he said.
Latest data also signaled a fall in input prices, with some companies attributing this to a switch to new suppliers, according to Baluch.
He said, however, charges continued to rise, indicating that firms wished to maintain and build their margins.
“Subdued inflationary pressures and a further improvement in the demand picture indicates that economic growth will likely be sustained in the coming months. Reflecting positive sentiment, optimism picked up to a nine-month high,” Baluch said.
The Philippine Statistics Authority said earlier that the producer price index (PPI) for manufacturing registered a slower annual decline of 0.8 percent in April 2024 from a year-on-year decrease of 1.1 percent in March 2024.
This brought the average annual growth rate of PPI from January to April 2024 to -1.1 percent. In April 2023, the PPI posted an annual increment of 2.5 percent.
The S&P said total sales were sustained in May, although the rate of increase eased fractionally from April. A further improvement in underlying demand trends and an expanding customer base helped stretch the current run of increase to nine consecutive months.
“Demand from external markets strengthened in May, with new export orders rising for the fourth straight month and at a pace that was the most pronounced since December 2016,’ it said, adding that growth in new sales from abroad was widely attributed to improved demand trends in key export markets and new client wins.
“Looking ahead, expectations for the 12-month outlook for output picked up for the first time in five months, with optimism hitting a nine-month high. Firms were hopeful of further improvements in demand conditions and had planned to expand their business operations and introduce new products,” S&P said.
