The manufacturing sector recorded a slower improvement in May, as goods producers struggled to raise their employment numbers.
According to a report released yesterday, the headline S&P Global Philippines manufacturing purchasing managers’ index, a composite single-figure indicator of manufacturing performance, posted above the neutral 50 mark that separates contraction from expansion for the ninth successive month in May.
At 51.9, the figure for the month is slightly lower than the 52.2 in April, indicating a modest improvement in operating conditions.
The report said despite growth in production requirements, companies struggled to raise their staffing levels, with job shedding noted for the first time since December 2023.
“The rate of decrease was the fastest in nine months, with firms largely attributing this to voluntary leavers. Backlogs, though, continued to fall, indicating that many companies were equipped to handle the sustained rise in demand,” the report said.
Maryam Baluch, economist at S&P Global Market Intelligence, said the country’s manufacturing sector continued to report further gains mid-way through the second quarter, with growth sustained in new orders and output.
“Further expansions in business requirements supported a rise in purchasing activity and inventories. However, firms struggled to maintain their workforce numbers. Latest data also signaled a fall in input prices, with some companies attributing this to a switch to new suppliers. However, charges continued to rise, indicating that firms wished to maintain and build their margins,” Baluch said.
“Subdued inflationary pressures and a further improvement in the demand picture indicates that economic growth will likely be sustained in the coming months. Reflecting positive sentiment, optimism picked up to a nine-month high,” Baluch added.
