Philippines PMI July 2021


Philippines: Manufacturing PMI edges down in July but remains in expansionary territory

August 2, 2021

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, edged down to 50.4 in July, following June’s 50.8. That said, the PMI remained above the crucial 50-threshold, signaling a mild improvement in manufacturing sector conditions compared to the previous month.

July’s deteriorated was largely attributed to ongoing contractions in output and new orders, with the former dropping for the fourth successive month, due to weak domestic demand. Against this backdrop, firms reduced their staffing levels for the 17th month running. However, improved global economic conditions sustained export orders, which declined only marginally, while manufacturers grew more optimistic with regards to output expectations over the 12 coming months.

On the price front, albeit softening from the prior month, the introduction of a VAT tax for some goods and increased costs for raw materials kept input cost inflation elevated. Similarly, output cost inflation moderated from June but remained high nonetheless.

FocusEconomics Consensus Forecast panelists see manufacturing output rising 6.6% in 2021, which is down 0.3 percentage points from the previous month’s estimate. For 2022, the panel expects manufacturing output to increase 5.3%.


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Philippines PMI Chart

Philippines PMI July 2021 1

Note: Philippines Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an overall increase compared to the previous month while readings below 50 indicate an overall decrease.
Source: IHS Markit.

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