Home » Press Releases » PH manufacturing output in April weakest in 19 months

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Philippine manufacturing fell to a nine-month low of 50.9 in April 2019 from 51.5 in March 2019, as output dropped to a 19-month low and new orders rose at the softest pace in nine months, according to the latest Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI).

“April PMI revealed an even more subdued picture for the Philippines,” David Owen, economist at IHS Markit, which compiles the PMI survey, said in a statement.

“With first-quarter results already reflecting weaker manufacturing growth than at the end of last year, the latest data did little to raise hopes for the second quarter. Output expanded at the weakest rate since September 2017, while new order growth was dampened by a quicker drop in export sales,” he added.

During the period, IHS Markit said companies that raised output levels highlighted a rise in customer demand. At the same time, many firms curtailed output or even stopped production due to a lack of raw materials.

Concurrently, while sales of manufactured goods increased solidly at the start of the second quarter, they did so at the slowest rate since July 2018. This was in part affected by a sustained drop in new export orders. The pace of decline was the fastest so far this year, linked to a lack of client demand from overseas.

Weaker growth in new orders led to limited input supply in April. Whilst purchases continued to increase, stock levels dropped for only the third time in the series history. Finished goods inventories were broadly unchanged from March, although some firms that expanded holdings related this to forecasts of future demand.

However, Owen said there was positive news during the period as “firms reported an alleviation of import delays due to the recent port congestion at Manila.”

“This led to the first improvement in supplier delivery times in nine months, although slowing output growth still led manufacturers to reduce stock levels.

“With the national election during May, production growth may be stifled again in the next survey. As such, it is looking like the second quarter may prove to be a challenging one for the manufacturing sector,” Owen noted.

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