PH manufacturing improves further in April

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  • The Philippine manufacturing sector improved further in April, the strongest showing in five months amid renewed growth in output and a stronger rise in new orders
  • The headline Purchasing Managers’ Index posted at 52.2 in April 2024, up from 50.9 in March 2024
  • Export market conditions also improved in April, with new export orders rising for the third month running and at the quickest pace in five months 

The Philippine manufacturing sector improved further in April, the strongest showing in five months amid renewed growth in output and a stronger rise in new orders.

The headline Philippines’ Purchasing Managers’ Index (PMI) – a  composite single-figure indicator of manufacturing performance – posted at 52.2 in April 2024, up from 50.9 in March 2024, according to S&P Global.

The latest reading indicated the strongest improvement in operating conditions across the Philippine manufacturing sector in five months, S&P Global said in a statement.

“Building on growth seen in the first quarter of the year, the Filipino manufacturing sector showcased further gains in April,” S&P Global Market Intelligence economist Maryam Baluch said.

“A quicker rate of expansion was observed for new orders, which in turn triggered a renewed and solid rise in production. Additionally, business from overseas markets also expanded at a stronger rate,” Baluch added.

New orders rose further in April and were the fastest recorded since November last year.

Export market conditions also improved in April, with new export orders rising for the third month running and at the quickest pace in five months.

Rising inflows of new work supported renewed growth in goods production at Filipino manufacturers.

Moreover, the rate of expansion was the most pronounced in four months and solid overall.

S&P Global said favorable demand conditions and rising production requirements encouraged increased purchasing efforts at manufacturers with the latest upturn being the quickest in nine months.

Stronger rates of stockpiling were also recorded at Philippine manufacturing firms, with pre- and post-production stocks accumulated at fastest paces in 12 and 17 months, respectively.

The upturn in demand also supported increased efforts to raise hiring, with manufacturing employment growing for the third consecutive month – albeit with the rate of job creation easing slightly from March.

Greater workforce numbers allowed Filipino manufacturers to keep on top of their workloads.

The accelerated growth in new orders, however, meant that pressure on capacity had intensified, with some firms struggling to complete work in hand. As a result, the latest rate of backlog depletion was marginal overall and the weakest since August 2023.

Turning to prices, cost burdens continued to rise further in April amid reports of higher raw material costs.

However, similar to that seen in the previous survey period, the rate of input price inflation was modest overall and much slower than the long-run survey average.

A relatively soft rise in input prices allowed goods producers to price more competitively. April data revealed that charges were broadly left unchanged on the month.

Looking ahead, the sentiment across the Philippines manufacturing sector was largely positive with nearly a quarter of surveyed businesses predicting growth in production. That said, the degree of confidence slipped to a four-year low.

READ: PH March manufacturing output slides into contraction, first since July 2022