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MANILA – The S&P Global Manufacturing Purchasing Managers’ Index (PMI) reported a moderated growth for the Philippines’ manufacturing sector in June this year.
In its monthly manufacturing PMI report released Monday, S&P Global said the domestic sector posted an index of 50.9 in June, which slowed down from a 52.2 score in May 2023.
Indices above 50 indicate growth in the manufacturing sector, while indices below the neutral score signal deterioration of the industry.
“The muted headline figure reflected softer rates of expansion across both output and new orders, while manufacturing employment registered a fresh new reduction,” S&P Global Market Intelligence economist Maryam Baluch said.
The report said output levels last month improved further, however, its growth is the weakest in the past 10 months since September 2022.
It added that new orders rose at a softer pace, with growth driven by additional demand and orders from new clients.
Helping the growth of the manufacturing sector last month is foreign demand which also grew in June.
New orders also backed the buying activities of manufacturers last month. Producers’ purchasing activities have increased for 10 consecutive months, S&P Global said.
On the other hand, the rate of input prices was the weakest since October 2020. This has also softened output charges in June 2023, which is the slowest in over two and a half years.
“With inflationary pressures fading and global economic uncertainties still a looming threat to growth, the central bank maintained their policy rate at 6.25 percent for the second successive policy meeting in June” Baluch added.
In terms of hiring activities, Philippine-based manufacturing firms posted a fresh contraction in employment last month.
“According to surveyed businesses, the renewed reduction in manufacturing employment was in part due to the non-replacement of voluntary leavers as well as some firms actively reducing their payroll numbers,” the report said.
Meanwhile, the business confidence of manufacturers was the strongest in five months.
“Going forward, the sector remains optimistic of growth in the coming 12 months. However, global headwinds could dampen the outlook for manufacturers in the Philippines,” Baluch said. (PNA)
