The manufacturing sector seemed to have started to return to growth path with the latest purchasing managers’ index (PMI) rising to 50.8 in June as quarantine restrictions eased in areas hosting a number of factories and exporters.
The above-50 PMI in June indicated expansion in manufacturing activities. This reversed the below-50 indices, which meant contraction, in April and May when National Capital Region Plus—Metro Manila and the provinces of Bulacan, Cavite, Laguna and Rizal—was placed under stringent lockdown measures to contain a surge in COVID-19 infections.
“Declines across output, new orders and employment eased while exports rose sharply during the month,” Shreeya Patel, economist at London-based global information provider IHS Markit Ltd., said in a report on Thursday.
“Expectations of greater production levels were reflected in firms adding to their stock levels, amid hopes of a stronger third quarter,” Patel said.
However, she said the remaining quarantine restrictions still subdued domestic demand, while congestion of ports had been slowing global trade and hampering export sales.
Manufacturers also faced increases in raw material and transportation costs during the month, Patel said.
“Output prices rose further, and at the quickest rate in over two years, suggesting firms are committed to somewhat cushioning any potential losses,” she added
“With the vaccination program still in the early stages, controlling the spread of the pandemic remains principal to preventing another series of tightening restrictions. Firms, in the meantime, will hope issues surrounding the supply of materials are resolved,” Patel said.
The Philippines, nonetheless, bucked the trend in the Asean (Association of Southeast Asian Nations) where the regional PMI slipped to 49 in June from 51.8 last May as most other countries in the region posted negative indices when factory production and order books fell due to tighter lockdown measures and supply chain issues. INQ