Manufacturing output growth unchanged — S&P

Last month’s manufacturing index remained idle after posting the same number as that of July 2024, S&P Global reported.

In a report released on Monday, the headline S&P Global Philippines Manufacturing PMI — a composite single-figure indicator of manufacturing performance — was unchanged from July, idling at 51.2 in August.

The health of the manufacturing sector had strengthened in successive months for a year, albe it with the latest data signaling only a modest improvement, according to the report.

But Maryam Baluch, S&P Global Market Intelligence economist, treated the unchanged gains of the country’s manufacturing sector as “modest gains midway through the third quarter.”

“Growth in output and new orders accelerated during the month, thereby highlighting improving demand trends,” she added.

“However, employment fell, and buying activity cooled, suggesting that manufacturers remain cautious about growth prospects. Confidence levels also waned in the latest survey period and hit a four-month low, further confirming that expectations surrounding the production outlook have softened,” she explained.

PMI above the 50.0 threshold indicates expansion, while levels below 50 indicate a tightening.

Demand improving

Moreover, the S&P report stated that underlying data signaled improved demand trends, with Filipino goods producers recording the strongest uptick in new orders in three months.

However, demand from foreign customers faltered in August, as new export sales fell for the first time since the start of the year.

“The data thus suggests that demand was domestically driven. Nonetheless, overall growth in new orders supported a stronger uptick in output during August. The rate of growth quickened from July’s four-month low and was broadly in line with the historical series average,” according to the report.

Meanwhile, growth in business requirements supported firms’ decisions to increase purchasing in August.

“That said, the rate of increase softened to a five-month low and was modest overall. The slowdown in buying activity was reflected in a softer build-up of pre-production inventories held at manufacturers. The upturn was slight and the weakest in the current six-month period of accumulation,” the report stated.