Local factories stumble in April as headwinds crimp output

MANILA, Philippines — Local factories lost some momentum as headwinds, in the form of retreating demand and resignations, continued to roil production in April.

A survey of around 400 manufacturers in the country found that the Philippines’ Purchasing Managers’ Index (PMI), a gauge of manufacturing output, grew at a softer clip of 51.4 in April from the 52.5 outturn in March, S&P Global said in a report on Tuesday.

The latest reading nevertheless settled above the 50-benchmark separating growth from contraction. S&P explained that the latest outturn was “at an eight-month low and posted below the average recorded over the series history.”

This was still the 15th straight month of growth in operating conditions across the local manufacturing sector. 

“...the data suggested a shift in demand patterns as new export orders grew at the fastest rate in nearly two years and helped support the upturn in total new sales,” Maryam Baluch, economist at S&P Global Market Intelligence, said in a commentary.

Supply chain bottlenecks, such as raw material scarcity, delivery delays, and expensive energy prices, pushed operating costs up, which continue to hamper production in local factories since 2022. In April, S&P reckoned price pressures were easing, compelling firms to raise prices at the slowest pace in 28 months. 

Churning new business slowed in April. S&P noted market competition was intensifying as well as demand in the same month. Despite this, demand for locally-manufactured goods were in vogue across foreign markets. 

Workforce resignations were notable in the previous month. The latest report said that while this was still marginal, this was the third straight month of decline in local factories. Nicholas Antonio Mapa, senior economist at ING Bank in Manila, found some bright spots in the latest reading.

“Employment numbers fell anew although there was an easing of productions, a sign that bodes well for the inflation front,” he said in a Viber message. — Ramon Royandoyan