Manufacturing hits new low in April

Manufacturing in the Philippines shrank to its lowest level in April, the height of the enhanced community quarantine (ECQ) imposed in Luzon and other parts of the country to contain the spread of the COVID-19 disease.

The latest manufacturing purchasing managers’ index released by London-based global information provider IHS Markit Ltd. on Monday showed that last month’s PMI further slid to 31.6—a record low.

Since the PMI remained below the 50 “no-change” or neutral mark, it meant that manufacturing contracted. The index fell below 50 in March as the ECQ started during the middle of that month.

IHS Markit collected data on April 7 to 23 amid the lockdown that stopped manufacturing of nonessential goods due to physical distancing restrictions.

“Production fell rapidly, while new orders and export sales declined at record paces. Job shedding continued, although the rate of decrease softened from March,” IHS Markit said in its report.

“Lockdown measures were extended throughout April, leaving most firms unable to operate at normal capacity. Production levels thus collapsed, with the rate of contraction by far the quickest since the series began in January 2016,” IHS Markit said.

“The lockdown also had a large impact on manufacturing demand at the start of the second quarter as restricted activity led clients to cancel orders and consumers to limit spending. In addition, exports fell drastically due to company closures and global measures to limit the spread of COVID-19. As a result, total new orders fell at the fastest pace seen in the series history,” IHS Markit added.

IHS Markit also noted that “preproduction inventories fell substantially, while stocks of finished goods also decreased at a sharp rate” amid the ECQ.

IHS Markit said that the number of layoffs eased in April compared to March when the ECQ began, but last month’s job shedding remained steep. INQ