The manufacturing sector recorded a slightly lower improvement in July, according to a report released yesterday.
The headline S&P Global Philippines manufacturing purchasing managers’ index (PMI) posted at 51.2 in July was broadly in line with the 51.3 reading for June.
This marked the 11th successive month of improvement in operating conditions.
The latest index reading signaled only a modest improvement in the health of the Filipino manufacturing sector, and one that was the weakest since March.
The report said inflationary concerns remained at bay, despite cost burdens rising at the fastest pace in five months.
“The second half of the year started modestly, with the Filipino manufacturing sector signalling further upticks in output and new orders. Though in both cases, the rates of increase were weaker than their respective long-run averages, thereby indicating relatively subdued growth across the sector,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
“Nonetheless, a historically muted inflationary environment, as indicated by the PMI price gauges, could open the door to policy rate cuts. Easing financial conditions should help solidify and strengthen growth in the coming months. Moreover, sustained expansions in purchasing activity and the renewed uptick in workforce numbers, indicate that goods producers are likely banking on the strengthening of demand conditions in the coming months,” Baluch added.
In an emailed statement, Michael Ricafort Rizal Commercial Banking Corp. chief economist, said the performance of the sector in July was also partly impacted by Typhoon Carina-related disruptions on manufacturing and other business activities in Metro Manila and nearby provinces with large manufacturing or industrial facilities.
“Nevertheless, the continued expansion mode in the local manufacturing PMI (is) still a good signal for the economy’s growth,” Ricafort said.
