The Filipino manufacturing sector further improved its performance in April, registering an accelerated increase in new orders and renewed growth in factory output, according to the latest Manufacturing Purchasing Managers Index (PMI) from S&P Global.
“Building on growth seen in the first quarter of the year, the Filipino manufacturing sector showcased further gains in April. A quicker rate of expansion was observed for new orders, which in turn triggered a renewed and solid rise in production. Additionally, business from overseas markets also expanded at a stronger rate,” said Maryam Baluch, economist at S&P Global Market Intelligence.
The headline S&P Global Philippines Manufacturing PMI posted at 52.2 in April, up from 50.9 in March, indicating the strongest improvement in operating conditions across the Filipino manufacturing sector in five months.
The report said new orders rose further in April and at the fastest rate since November last year. Export market conditions also improved, with new export orders rising for the third month running and at the quickest pace in five months.
The rising inflow of new work supported renewed growth in goods production for Filipino manufacturers. The expansion rate was the most pronounced in four months, said S&P Global.
Manufacturers responded to the favorable demand conditions and rising production requirements by increasing purchasing efforts, with the latest upturn being the quickest in nine months. Manufacturing firms also recorded stronger rates of stockpiling, with pre- and post-production stocks accumulated at the fastest paces in 12 and 17 months, respectively.
The upturn in demand likewise prompted firms to increase hiring activity, with manufacturing employment growing for the third consecutive month, although the rate of job creation eased slightly from March.
With more workers deployed, most manufacturing companies were able to keep pace with their workloads. However, some struggled to complete the work in hand, feeling greater pressure on their capacity as new orders rose. As a result, the latest rate of backlog depletion was marginal and the weakest since August 2023.
On prices, cost burdens continued to rise further in April amid reports of higher raw material costs. However, the rate of input price inflation was modest and much slower than the average. A relatively soft rise in input prices allowed goods producers to set more competitive prices. April data revealed that charges were broadly left unchanged on the month.
Looking ahead, sentiment across the Philippines manufacturing sector was largely positive, with nearly a quarter of surveyed businesses predicting growth in production. However, the degree of confidence slipped to a four-year low, said S&P Global.
