The recent surge in coronavirus disease 2019 (COVID-19) cases which led to tighter quarantine restrictions prompted some factory closures and renewed fall in manufacturing output in April, the latest report from IHS Markit showed.
The IHS Markit Philippines manufacturing purchasing managers’ index (PMI) registered at 49 in April, down sharply from 52.2 to signal a marginal contraction in operating conditions across the Filipino manufacturing sector, the report said yesterday.
The headline index dropped below the 50 neutral value after three successive months of growth.
“The Philippines’ manufacturing PMI revealed a renewed contraction in output levels across the goods-producing sector during April. A resurgence in COVID-19 case numbers led to tighter lockdown restrictions amid efforts to control the spread of the disease,” the report said.
“As a result, many factories suspended their operations, and client demand declined sharply. Lower output requirements led to a fourteenth consecutive reduction in employment while material shortages added to delivery delays,” it added.
The report said manufacturers in the Philippines highlighted a steep decline in output at the start of the quarter, which was largely attributed to enhanced community quarantine measures, undertaken to control the spread of the disease.
“April survey data revealed a setback for the Filipino economy, with operating conditions falling back into contraction territory after only one full quarter of growth. Tightening restrictions led to another round of factory and business closures, with output particularly hard-hit. Meanwhile, labor force cuts extended into the second quarter of 2021,” Shreeya Patel, economist at IHS Markit, said.
“Supply-side pressures and rising costs were again evident throughout the latest survey period with material shortages and transportation bottlenecks widely reported. Firms will hope that these issues are resolved, but with the full impact of the Suez blockage yet to take effect, the disruption to global trade is expected to reverberate,” she added.
The report said the 12-month outlook for output slipped further at the start of the quarter and was among the weakest in the series history.
“On the brighter side, policymakers have stressed the importance of the vaccination programme in bringing a return to normality and while the initial progression was somewhat slow, the roll-out seems to have gathered pace in recent weeks,” Patel said.
