Manila truck ban cuts July PMI

0
1096

ID-100199287The Philippines’ composite Purchasing Managers Index (PMI) dipped to 56.8 points in July from 59.5 points in June, attributed to the Manila truck ban and the port congestion that ensued.

“Respondents attributed this to the truck ban policy and port congestion problems that trapped goods in transit,” a report from the Bangko Sentral ng Pilipinas (Central Bank of the Philippines) said.

The decline came despite an improvement in the PMI of the services sector, which was recorded at 63.7 points in July from 61.2 in June 2014 and from 58.5 points in July of 2013. However, the increase was offset by a decrease in the PMI of the manufacturing sector to 55.2 points from 56.1 points in June, and in retail and wholesale trade to 52.6 points from 58 points.

The PMI is a measure of an industry’s health based on new orders, inventory levels, production, supplier deliveries, and employment environment.

A PMI score of more than 50 points indicates a month-on-month expansion of an industry, while a score below 50 points shows a contraction. This means the 56.8 points registered for July 2014 is still on a positive note.

In a separate report, Sin Beng Ong, chief Southeast Asian economist of JP Morgan, said that although the Manila truck ban was lifted in mid-September, clearing the backlog in its wake remains a challenge.

Ong said, however, that the improvement in the July import figures raises hopes for the resolution of port-related bottlenecks and provides “room for some optimism.”

Merchandise imports in July rose 0.002% over the same period last year. Although imports were down 1.5% quarter-on-quarter, Ong said the July figure marked a material improvement from the 28% decline in April.

“In level terms, the latest import data suggest an inflection in imports following the material softness earlier during the year,” Ong noted.

The economist said this improvement boosts hopes that port-related bottlenecks could be easing. – Roumina Pablo

Image courtesy of photoraidz at FreeDigitalPhotos.net