Manufacturing growth slows in May

MANILA, Philippines — The Philippine manufacturing sector expanded at a slower pace in May despite improved demand conditions as firms saw declining workforce numbers, according to S&P Global.

S&P Global said the country’s manufacturing purchasing managers’ index (PMI) declined slightly to 51.9 in May from 52.2 in April.

The headline figure was above the neutral 50-mark that separates expansion from contraction, indicating a modest improvement in operating conditions.

Generated from a survey of around 400 manufacturers, the PMI considers new orders, output, employment, suppliers’ delivery times and stocks of purchases.

“The Filipino manufacturing sector continued to report further gains mid-way through the second quarter, with growth sustained in new orders and output,” S&P Global Market Intelligence economist Maryam Baluch said in a statement.

Demand from foreign markets also improved, with new export orders picking up at an accelerated rate.

Baluch said increased business requirements also supported the rise in purchasing activity and inventories.

“However, firms struggled to maintain their workforce numbers with job shedding noted for the first time in five months,” she said.

S&P Global said the rate of decline in workforce count was also the fastest in nine months, largely due to employees opting to leave.

The PMI data also signaled a drop in input prices as some manufacturers switched to new suppliers.

However, charges continued to rise, indicating manufacturing firms’ intent to build profit margins.

For the next 12 months, manufacturers’ outlook for output picked up for the first time in five months, with optimism hitting a nine-month high.

Manufacturers are looking to expand operations and introduce new products amid improving demand.

“Subdued inflationary pressures and a further improvement in the demand picture indicates that economic growth will likely be sustained in the coming months,” Baluch said.