Philippine manufacturing output up for 9th month in May
MANILA — Philippine manufacturing output grew for the ninth straight month in May amid rising production and improving demand, the latest report from S&P Global said on Monday.
The May growth, however, was the slowest in two months with the S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI), a measure of the country’s manufacturing output, easing to 51.9 in May from 52.2 in April.
That said, the latest reading marked the ninth straight month that the index settled above the 50-mark that separates growth from contraction.
The 50-reading means improved operating conditions while a reading below 50 means deterioration.
The Philippines’ PMI reading in May was also the second slowest among four Association of Southeast Asian Nations (Asean) member countries, behind Indonesia and Myanmar with 52.1.
New orders
S&P Global said the growth in local goods production continued to rise “solidly” as demand in international markets also rose at a fast rate.
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“The Filipino manufacturing sector continued to report further gains mid-way through the second quarter, with growth sustained in new orders and output. Further expansions in business requirements supported a rise in purchasing activity and inventories,” S&P Global Market Intelligence economist Maryam Baluch said in a statement.
Likewise, demand from external markets showed robust growth as export orders increased for the fourth straight month, mainly due to improved demand trends in key export markets and new client wins.
With the rising demand, the report said that many companies plan to build their inventory to match demand.
Improved demand
The report also suggested that some companies had shifted to more competitively priced suppliers, resulting in a decline in costs.
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“Latest data also signaled a fall in input prices, with some companies attributing this to a switch to new suppliers. However, charges continued to rise, indicating that firms wished to maintain and build their margins,” she added.
But despite the expansion seen in the manufacturing sector, the report said that producers had fewer workers in May, the first job shedding recorded in five months.
The decline in employment was mainly due to the “voluntary leavers” but S&P noted that many companies were still able to handle the increase in production demand despite the leaner workforce.
Baluch remained optimistic about continued manufacturing output growth in the coming months on easing inflation and the steady increase in demand from the global market. INQ
