Philippines PMI April 2017

Philippines

Philippines: Manufacturing PMI declines slightly in April

May 2, 2017

The Philippines’ manufacturing industry lost some momentum in April. The Manufacturing Purchasing Managers’ Index decreased from 53.8 in March to 53.3 in April, according to a release provided by Nikkei and IHS Markit. The index nevertheless remained well above the 50-point threshold which separates expansion from contraction in the manufacturing sector.

April’s deceleration came mainly on the back of slower growth in output, new orders and employment. Overall new orders expanded solidly in April, although losing some strength from the previous month, on the back of strong demand and healthy construction activity. On the external front, export sales expanded at the weakest pace in 14 months, suggesting domestic demand continues to be the main driver of growth in manufacturing. Strong growth in new orders led output to grow at a similar pace to that seen in March. Employment consequently continued to increase and backlogs of work, thanks in part to the additional staff, declined. Regarding prices, input costs grew robustly on the back of a weaker exchange rate and higher raw material prices, driving suppliers to increase output prices at a broadly similar rate.

Bernard Aw, economist at IHS Markit, commented: “Nikkei Philippines PMI data suggests the solid manufacturing upturn seen in the first quarter was sustained into the second quarter, underpinned by domestic demand. There were further signs that growth momentum will be sustained for the rest of the quarter, as forward-looking indicators such as new orders and expectations continued to show robust trends. […] Reports of increased construction activity alongside greater public infrastructure spending are expected to support the manufacturing industry in the coming months.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 5.9% in 2017, which is down 0.5 percentage points from the previous month’s estimate. For 2018, the panel expects manufacturing to increase 5.9%.


Author: Massimo Bassetti, Economist

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Philippines PMI April 2017

Note: Nikkei Indonesia Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 indicate a contraction.
Source: Nikkei and IHS Markit.


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