The manufacturing sector posted a modest improvement in March, as output slides into contraction for the first time since July 2022, according to a report released yesterday.
The headline S&P Global Philippines Manufacturing purchasing managers’ index, an indicator of manufacturing performance, remained broadly unchanged from 51 in February to 50.9 in March.
The report said the latest reading marked a seventh consecutive monthly improvement in operating conditions across the Philippines’ manufacturing sector, although one was modest overall.
According to the report, central to the latest improvement across the sector was a further expansion in new orders received in March.
However, output fell for the first time in 20 months.
“While some firms noted softer demand conditions, others commented that material shortages hampered capacity, as evidenced by the lengthening of supplier lead times,” the report said.
Maryam Baluch, economist at S&P Global Market Intelligence, said the health of the Filipino manufacturing sector revealed some underlying concerns towards the end of the first quarter.
“Contributing to the somewhat mixed picture was a fresh fall in production levels, with companies attributing this to material shortages. The downturn came despite firms in general recording sustained demand for goods,” Baluch said.
“However, if firms are able to successfully secure materials and build their stocks, the downturn in output could be fleeting. Additionally, the employment picture also improved, and firms raised their buying activity further in a bid to account for material shortages,” Baluch added.
