The Philippine manufacturing sector’s growth eased to a three-month low in June amid a notable slowdown in the expansion of new orders, according to a report released yesterday.
The headline S&P Global Philippines manufacturing purchasing managers’ index fell to 51.3 in June from 51.9 in May.
While the latest reading signaled a softer rate of growth, it still posted the 10th consecutive month of improvement in the country’s manufacturing sector.
According to the report, there was a notable cooldown in new order growth, indicating a weaker improvement in underlying demand trends in June.
“Easing further from April, the latest upturn was the second-weakest in the current ten-month sequence of growth,” it said.
Additionally, S&P Global said foreign demand for Filipino manufactured goods also eased, as the rate of growth in new export orders slowed from May’s recent high to a three-month low.
“While strong improvements in demand trends earlier in the second quarter allowed manufacturing firms to raise their production volumes at a solid and sustained rate in June, the recent cooling in demand conditions could mean weaker upticks in output as we move into the second half of the year,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
“Moreover, while growth in output fed through to higher purchasing activity, it failed to translate into job creation. The second consecutive month of job shedding reflected the lack of pressure on operating capacity within the sector, as backlogs were depleted sharply,” she added.
Baluch also said future expectations retreated, further alluding to softening sentiment in the outlook.
“However, inflationary pressures remained in check, despite a renewed rise in operating costs,” Baluch said.
“Relatively soft and subdued upticks in costs and charges could help the sector generate demand in the coming months,” she added.
