THE PHILIPPINES’ manufacturing sector slowed in July as production and new orders declined, signaling weaker global demand, S&P Global said on Monday.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) reading stood at 50.8 in July, lower than the 53.8 reading in June.
While the PMI remained in expansion territory in July, the reading was the lowest in six months. Excluding the flat reading in January, S&P Global said the July PMI was the weakest in 11 months.
A PMI reading above 50 denotes improvement in operating conditions compared with the preceding month, while a reading below 50 signals deterioration.
“Data from the latest PMI survey indicated a loss in growth momentum at goods producers in the Philippines. Renewed contractions in output and new orders, albeit only mild, were recorded in July. The headline figure slipped to 50.8 in July to signal the slowest expansion since January,” Maryam Baluch, economist at S&P Global Market Intelligence, said in a statement.
The headline PMI measures manufacturing conditions through the weighted average of five indices: new orders (30%), output (25%), employment (20%), suppliers’ delivery times (15%) and stocks of purchases (10%).
S&P Global said last month’s contraction in output and new orders was the first since January. “The rates of reduction were modest but signified a visible change from the strong expansions seen in June, amid challenging demand conditions,” it said.
Firms also reported weaker demand from foreign clients in July.
“While the pace of decrease was the softest in the current five-month sequence of contraction, global uncertainties and the ongoing impact of the pandemic continued to weigh on export demand,” S&P Global said.
Manufacturers’ buying activity was muted in July, as they had less business requirements and prices of materials rose.
Despite the slowdown, S&P Global said Philippine firms added more workers for a third month in a row in July. The…
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