Local manufacturing growth slowed in February due to the ongoing supply chain concerns, the latest survey from S&P Global revealed.

The Philippines’ S&P Global manufacturing purchasing managers' index (PMI) slipped to 52.7 last month from its seven-month high of 53.5 posted in January. The latest reading was the softest improvement in three months.

In a statement on Wednesday, March 1, Maryam Baluch, S&P Global Market Intelligence economist said the ongoing supply chain concerns continued to remain a drag on the sector.

“Supplier performance worsened further, and to a greater extent, as material scarcity, port congestion and difficult transportation conditions resulted in a further lengthening of average lead times,” Baluch said.

Costs burdens remained stubbornly high in February, with the latest data indicating an intensification in price pressures, forcing operating expenses to rise.

Employment index also ticked down for the second month running and signaled the first fall in workforce numbers since November last year.

“There were reports of resignations, with several firms also actively laying off staff. That said, the pace of job shedding was marginal overall,” S&P Global said.

But looking ahead, local manufacturing companies maintained a positive year-ahead outlook for output.

In February, half of the panelists expect higher output in the coming 12 months. However, sentiment weakened from January, and was below the long-term series average as concerns regarding competition and the rising costs of inputs seeped into expectations.

“Despite the ongoing supply-side challenges and an uncertain international climate, the Filipino manufacturing sector has remained resilient, benefitting greatly from domestic demand,” Baluch said.

“Firms hope that the buoyancy in the market is maintained as we progress further into the year,” the economist added.