Philippine manufacturing growth slowed to a seven-month low in March as raw material shortages and delivery delays drove operating costs higher, results of the latest survey conducted by S&P Global revealed.
The headline S&P Global Philippines Manufacturing PMI stood at 52.5 in March, down from the 52.7 in February, but the 14th straight month above the 50.0-threshold that separates expansion and contraction.
“[O]perating conditions improved at the slowest pace in seven months, partly due to the softer rise in production and stocks of purchases, and with a second month of job shedding weighing on the headline index,” S&P Global Market Intelligence Economist Maryam Baluch said in a commentary.
The data revealed, however, that pressures on inflation and supply chains have eased, operating expenses grew at the slowest pace in 27 months, and the incidence of delays was among the weakest since August 2019.
Headline inflation clocked in at 8.6% in February, slower than the 8.7% print in January, but core inflation accelerated to 7.8% from 7.4%.
The central bank expects this to have slowed to the 6.4% to 8.2% range in March, given the rollback in domestic petroleum prices, and lower prices of fruits and vegetables, and chicken and sugar.
“The first quarter of 2023 concluded on a solid note, with a further expansion reported across the Filipino manufacturing sector, according to the latest PMI data,” Baluch said.
“Both output and new orders rose at historically strong rates. Consequently, firms raised their buying activity to keep up with the growth in sales,” she added.
The survey found that local manufacturers remained generally optimistic as over half of the respondents expect output growth in the coming year, but the degree of confidence fell below the historical trend.
The S&P Global Philippines Manufacturing PMI is compiled from responses of purchasing managers in a panel of around 400 manufacturers. It is a weighted average of new orders, output, employment, suppliers’ delivery times, and stocks of purchases.
Responses are collected in the second half of each month, indicating the direction of change compared with the previous month.
The Philippine Statistics Authority (PSA) is scheduled to release official government data on manufacturing for the month of March on June 8, 2023.—AOL, GMA Integrated News