The Philippines’ S&P Global manufacturing purchasing managers' index slides to 51.4 in April from 52.5 in the previous month.
Maryam Baluch, S&P Global Market Intelligence, economist says the start of the second quarter signalled a loss of momentum across the local manufacturing sector.
Both new orders and output grow at much softer rates. However, there is a shift in demand patterns as new export orders grew at the fastest rate.
Looking ahead, Filipino manufacturers remain largely optimistic, as the degree of confidence in the year-ahead outlook for output reached a three-month high.
Factory activity weakens amid lower orders
In April
May 2, 2023 02:16 AM
At a glance
Factory activity slipped to its slowest growth pace in eight months after new orders and productions expanded at softer levels in April, along with difficulties of manufacturers in retaining staff.
The Philippines’ S&P Global manufacturing purchasing managers' index (PMI) slid to 51.4 in April from 52.5 in the previous month. The latest figure, however, remained above the crucial 50.0 neutral threshold for the 15th consecutive month.
Maryam Baluch, S&P Global Market Intelligence, economist said softer uptick in business conditions across the local manufacturing sector was due to a relatively muted upturn in new business.
The weakening new business growth was driven by increased market competition and softer demand, particular from the domestic market.
S&P Global Market Intelligence, however, noted that new orders coming from overseas increased at a stronger pace last month, hitting its quickest expansion in nearly two years.
In line with the softer new business uptick, Filipino manufacturers also scaled down additional productions during the month.
Furthermore, there were reported widespread resignations, resulting in a third consecutive monthly contraction in payroll numbers across the industry in April.
“Firms linked this to difficulties in retaining staff. Moreover, alongside reports of staff shortages, firms also noted that material scarcity and delivery delays resulted in a second successive month of backlog accumulation,” S&P Global Market Intelligence said.
Meanwhile, Baluch said that price pressures cooled further in April.
“While operating expenses grew at a solid rate, the pace of inflation was the weakest in two- and-half-years. Reflecting softer hikes in cost burdens, manufacturers raised their selling prices at the slowest pace in 28 months,” Baluch said.
Looking ahead, Baluch said manufacturers across the Philippines remained largely optimistic, as the degree of confidence in the year-ahead outlook for output reached a three-month high.
“That said, the degree of confidence was weaker than the series average. Furthermore, our latest forecast expects growth in industrial production to moderate to five percent in 2023,” the economist added.