The local manufacturing activity slipped in May as producers struggled to raise their employment numbers, according to S&P Global report.

The Philippines manufacturing purchasing managers' index (PMI) slid to 51.9 last month from 52.2 in April, S&P Global said. The latest figure, however, remained above the crucial 50.0 neutral threshold for the ninth consecutive month.

Maryam Baluch, S&P Global Market Intelligence economist said that the struggle to maintain employees, which marks the first instance of job shedding in five months, contributed to the slowdown.

Despite this, Baluch said that the local manufacturing sector continued to report further gains halfway through the second quarter, with growth sustained in new orders and output.

Likewise, further expansions in business requirements supported a rise in purchasing activity and inventories

“Though with backlogs continuing to fall, goods producers still appear equipped to deal with tasks on hand. Latest data also signaled a fall in input prices, with some companies attributing this to a switch to new suppliers,” he said.

“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," he added.

In a separate research note, Michael L. Ricafort, Rizal Commercial Banking Corp. chief economist, said the Philippine manufacturing PMI is still better versus the contraction mode in other countries around the world, especially in the country’s major trading partners.

Ricafort also said that PMI's sustained expansion mode of above 50.0 is still a good signal of economic growth.

The total sales growth of the sector was sustained during the month, encouraging firms to raise their production volumes, with an increase noted in each of the last two survey periods, the report noted.

“In line with sustained growth in production requirements May data signalled a sixth successive monthly rise in input buying. Though the pace of increase softened, manufacturers in the Philippines expanded their purchasing activity solidly,” it said.

“Many companies were also looking to build their inventories in order to meet continued growth in output. Moreover, pre-production inventories were accumulated at a pace strongest in 13 months,” it added.