1. Manufacturing slowdown June
2. S&P factory output report
3. Economic growth deceleration
Manufacturing activity in the Philippines slowed in June, with the S&P Global Philippines Manufacturing Purchasing Managers’ Index dropping to 51.3 from 51.9. Despite this, the index remained above the 50-mark for the 10th consecutive month. The country’s PMI reading was the third highest among ASEAN countries, following Vietnam and Thailand. The cooling demand conditions in June led to weaker growth in new orders, impacting exports and backlog reduction. However, production output increased, and manufacturers remained optimistic for future expansions. S&P Global highlighted increased charges due to raw material shortages but forecasted improved demand conditions supporting factory output growth.
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Manufacturing activity in the Philippines saw a slowdown in June, marking its slowest pace of growth in three months, according to a report by S&P Global. The latest Philippines Manufacturing Purchasing Managers’ Index (PMI) dropped to 51.3 in June from 51.9 in the previous month, indicating a slight decline in manufacturing output.
Despite the decrease, the index has remained above the 50-mark for ten consecutive months, signaling continued growth in the sector. A PMI reading above 50 denotes an improvement in operating conditions, while a reading below 50 indicates a deterioration.
Compared to other ASEAN countries, the Philippines’ PMI growth in June was the third-fastest, behind Vietnam and Thailand. The average PMI for ASEAN countries expanded to 51.7 in June from 50.9 in May.
The report highlighted a weakening trend in new orders, which led to a notable cooldown in demand conditions. This slowdown in new orders was the second weakest in the 10-month growth period of the country’s PMI. Additionally, exports for local goods also eased to a three-month low in June.
Despite the challenges, production output increased solidly at its strongest pace in six months. This growth in production volumes, coupled with hopes of increased activity in the coming months, encouraged Filipino manufacturers to ramp up their purchasing activity. However, manufacturers also faced challenges such as shortages in raw materials, leading to increased charges.
Looking ahead, S&P Global Market Intelligence economist Maryam Baluch expressed optimism for the sector, as manufacturers remained hopeful that improved demand conditions would support further expansions in factory output. Baluch noted that while the level of optimism had decreased from May’s high, it was still stronger than the series average.
Overall, the report indicates a mixed outlook for the manufacturing sector in the Philippines. While there are challenges in terms of cooling demand conditions and supply chain disruptions, there are also opportunities for growth and expansion in production output. Manufacturers will need to navigate these challenges while capitalizing on the potential for increased activity in the coming months.
In conclusion, the manufacturing sector in the Philippines continues to show resilience and adaptability in the face of changing market conditions. By remaining proactive and agile in response to challenges, manufacturers can position themselves for sustained growth and success in the future.
Sources:
– [Philippine manufacturing output up for 9th month in May](https://business.inquirer.net/462155/ph-manufacturing-output-up-for-9th-month-in-may#ixzz8ejSV1K8v)
– [PH exports of goods, services breached $100B in 2023](https://business.inquirer.net/452794/ph-exports-of-goods-services-breached-100b-in-2023#ixzz8ejSyLirv)