Daily Tribune‘Latest data also signaled a fall in input prices, with some companies attributing this to a switch to new suppliers’
Photo from PNA
The manufacturing sector grew slower in May as more workers left their employers and payments to firms increased, a survey by S&P Global said Monday.
The local manufacturing posted 51.9 expansion last month, lower than the 52.2 recorded in April, based on S&P Global Purchasing Managers’ Index.
However, it said May’s level remains among the highest in nine months due to continued inflows of orders from abroad and growing customer base.
A mark of above 50 indicates an expansion in manufacturing.
S&P Global Market Intelligence economist Maryam Baluch said orders from abroad piled up the fastest since December 2016 and continued to increase over four months.
Q2 sustains growth
“The Filipino 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,” Baluch said.
She said the volume of inventory increased the fastest in 13 months. However, the volume of finished goods grew the slowest in three months following a decline in the number of workers in May after four months.
“Though with backlogs continuing to fall, goods producers still appear equipped to deal with tasks on hand. Latest data also signaled a fall in input prices, with some companies attributing this to a switch to new suppliers,” Baluch said.
She added companies were maximizing profits amid cheaper prices of inputs.
“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.
Moving forward, she expects Philippine manufacturing to grow further as global inflation improves.
“Subdued inflationary pressures and a further improvement in the demand picture indicate that economic growth will likely be sustained in the coming months. Reflecting positive sentiment, optimism picked up to a nine-month high,” Baluch said.
