Philippine factories showed signs of further output improvement in April as purchasing managers’ optimism climbed to a five-month high, according to the latest report from market intelligence firm S&P Global.
S&P Global reported that the Philippine Purchasing Managers’ Index (PMI), a closely monitored gauge of manufacturing sector performance, rose to 52.2 in April from 50.9 in March.
The April posting was the highest PMI since the 52.7 recording in November of 2023.
The latest reading also continued to stay above the 50-mark that separates growth from contraction. It suggests that manufacturers are building their inventory in anticipation of greater market demand.
“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,” S&P Global Market Intelligence economist Maryam Baluch said in a statement.
“With production requirements rising, hiring and purchasing activity remained in growth territory,” she added.
Baluch also noted that stock-building was becoming more widespread in anticipation of greater future output.
Further, she noted that price data indicated a relatively subdued inflationary environment, which could boost growth in the coming months as firms would be able to price more competitively.
The report also suggested that the busier work pipeline supported the growth in goods production, highlighting that the rate of expansion was the most pronounced in four months and was solid overall.
It added that the upturn in demand also supported the increased efforts to raise hiring, noting that employment growth in the manufacturing sector has continued for the third consecutive month.
Despite the greater workforce numbers, the report said that the accelerated growth also exerted pressure on the capacity, leaving some firms struggling with completing the work at hand.
Because of this trend, the report said that the latest rate of backlog depletion was “marginal overall,” and that it was also the weakest since August of last year.