Philippines: Manufacturing PMI falls back to contractionary territory in April
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, dropped to 49.0 in April, following March´s 52.2. As a result, the PMI moved below the crucial 50-threshold, signaling a deterioration in manufacturing sector conditions, compared to the previous months.
April’s downturn was largely owing to a significant drop in output as tightened lockdown restrictions, amid soaring new infections, weighed heavily on domestic demand. Similarly, new orders also tumbled, although the decline was somewhat cushioned by increased demand from European markets. Against this backdrop, companies reduced their staffing levels at the sharpest rate in four months. Meanwhile business sentiment deteriorated, although remaining in optimistic terrain. On the price front, input cost inflation accelerated once again, largely due to higher raw material costs, which prompted firms to hike their selling prices at the quickest rate in over two-and-a-half years.
Shreeya Patel, economist at IHS Markit, said:
“April survey data revealed a setback for the Filipino economy, with operating conditions falling back into contraction territory after only one full quarter of growth. Tightening restrictions led to another round of factory and business closures, with output particularly hard-hit. Meanwhile, labour force cuts extended into the second quarter of 2021.”