Philippine manufacturing growth cools to 8-month low in April

The country’s manufacturing growth fell to an eight-month low in April as new orders declined during the month, results of the latest survey conducted by S&P Global released on Monday showed.

The headline S&P Global Philippines Manufacturing PMI stood at 51.4 in April, reflecting a deceleration from 52.5 in March, but the 15th straight month above the 50.0 threshold that separates expansion and contraction.

“The start of the second quarter signaled a loss of momentum across the Filipino manufacturing sector,” S&P Global Market Intelligence economist Maryam Baluch said in a commentary.

“Furthermore, the data suggested a shift in demand patterns as new export orders grew at the fastest rate in nearly two years and helped support the upturn in total new sales,” she added.

New business growth slipped to an eight-month low amid increased market competition and softer demand, while output growth reported its weakest pace in six months.

Baluch noted that inflation also decelerated to the slowest in over two years, with manufacturers raising their selling prices at the slowest rate in 28 months.

Official inflation figures are set to be released by the Philippine Statistics Authority (PSA) on Friday, May 5, with the central bank expecting it to fall within the 6.3% to 7.1% range. This is lower than the 7.6% print in March, but still above the 2.0% to 4.0% target.

“Looking ahead, manufacturers across the Philippines remained largely optimistic, as the degree of confidence in the year-ahead outlook for output reached a three-month high,” Baluch said.

“That said, the degree of confidence was weaker than the series average. Furthermore, our latest forecast expects growth in industrial production to moderate to 5% in 2023,” she added.

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.—AOL, GMA Integrated News