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Philippine manufacturing saw softer growth in April 2023 as both new orders and output grew at much lower rates
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The latest Philippines Purchasing Managers’ Index was 51.4, down from March and an eight-month low
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“The start of the second quarter signalled a loss of momentum across the Filipino manufacturing sector,” S&P Global economist Maryam Baluch said
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Contributing to the softer uptick in business conditions across the Philippine manufacturing sector was a relatively muted upturn in new business
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April data suggested much sturdier demand for Filipino manufactured goods from foreign markets, as new export orders grew at a strong pace
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Manufacturing firms were upbeat on expectations for output over the coming 12 months
The Philippine manufacturing sector is at an eight-month low in April, with both new orders and output growing at much softer rates.
The latest Philippines Purchasing Managers’ Index (PMI) of 51.4 while above the 50.0 neutral threshold for the 15th successive month, is down from 52.5 in March, an eight-month low and posted below the average recorded over the series history, according to the latest survey of the New York-based financial and information analytics company S&P Global.
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“The start of the second quarter signalled a loss of momentum across the Filipino manufacturing sector,” S&P Global economist Maryam Baluch said.
“The headline PMI was at an eight-month low, with both new orders and output growing at much softer rates. Furthermore, the data suggested a shift in demand patterns as new export orders grew at the fastest rate in nearly two years and helped support the upturn in total new sales,” Baluch added.
Contributing to the softer uptick in business conditions across the Filipino manufacturing sector was a relatively muted upturn in new business.
The rate of growth was the weakest in the current eight-month sequence of expansion amid reports of increased market competition and softer demand.
In contrast, April data suggested much sturdier demand for Filipino manufactured goods from foreign markets, as new export orders grew at a strong pace. S&P Global noted that in fact, the rate of expansion quickened to the joint-fastest in nearly two years.
In line with the softer uptick in new business, firms also expanded their output, but at the weakest pace in six months.
Furthermore, widespread reports of resignations resulted in a third consecutive monthly contraction in payroll numbers across Filipino manufacturing firms in April. Though the rate of job shedding was marginal, firms linked this to difficulties in retaining staff.
Alongside reports of staff shortages, firms noted that material scarcity and delivery delays resulted in a second successive month of backlog accumulation.
Purchasing activity increased for the eighth month running during April. According to anecdotal evidence, the rise in new business supported growth in purchasing activity. That said, the respective seasonally adjusted index ticked down further from January’s recent high, and signaled the slowest rate of growth in 2023 so far.
At the same time, material shortages, higher prices at suppliers and the strengthening dollar resulted in a further rise in costs faced by manufacturers.
In line with subsiding cost pressures, the pace of charge inflation also slowed during April. Manufacturing firms raised their charges at only a marginal pace. The rate of increase was the softest in 28 months.
Looking ahead, manufacturing firms were upbeat on expectations for output over the coming 12 months.
Nearly half of PMI survey respondents were hopeful for growth, as the degree of optimism ticked up to a three-month high. Confidence stemmed from hopes of growth in new orders and improved demand conditions.
