Economy poised for sure, but slow growth

Major sectors of the economy remain poised for expansion, but growth may slow and hiring prospects may contract, indicators tracked by the Bangko Sentral ng Pilipinas (BSP) showed.

The composite purchasing managers index (PMI) score of three industries, namely services, manufacturing, and retail and wholesale trade, stood at 57.1 points in April. This was lower than March’s composite score of 58.6 points.

PMI scores are derived from orders, inventories, and other operational indicators. Any score above 50 means an industry is expected to expand in the coming months. On the other hand, a score below 50 indicates contraction.

The service sector remained the strongest of the three areas, with a PMI score of 59.9, steady from the previous month.

“Three of six key services indicators, namely new orders, average operating costs and employment showed faster expansions while business activity, outstanding business and price charge decelerated relative to the previous month,” the BSP said in its report.

Manufacturing PMI in April 2015 was lower at 52.2 from the 54.9 level registered in March 2015. Five of the twelve manufacturing sectors monitored—food and beverages, fabricated metal, machinery, communication and medical equipment, and motor and transport—decreased relative to the previous month.

“This could be due to the fewer number of working days in April,” the BSP said.

Key sub-indices of the manufacturing industry expanded at a slower pace in terms of new orders, production, and inventories from the month-ago levels.

According to the BSP, the employment index for manufacturers decelerated in April, as respondents reported fewer hires. However, the decline in the supplier deliveries index in April compared to the previous month suggests improvement on the time spent for deliveries.

The weakest performers in April were retailers and wholesalers. The sub-sector’s PMI significantly declined to 53.7 in April 2015 from 60.5 the month before. All the tracking variables—purchases, sales revenues, employment, supplier deliveries, and inventories—expanded at a slower rate from their month-ago levels.

“Both the retail and wholesale sub-sectors slowed down in April, which could be attributed to sluggish activities during the Holy Week,” the BSP said.