Philippines: Manufacturing PMI returns to expansionary territory in June
July 1, 2021
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose to 50.8 in June, following May’s 49.9. As a result, the PMI climbed above the crucial 50-threshold, signaling a marginal improvement in manufacturing sector conditions, compared to the previous month.
June’s upturn was largely attributed to rebounding in input buying, as well as firming sentiment among manufacturers with regard to output in the 12 coming months. Moreover, both new orders and output declined at a softer pace over the prior month, but remained subdued nonetheless, due to lingering Covid-19 restrictions. This, prompted manufacturers to reduce headcounts for the 15th successive month. On the price front, input cost inflation continued to rise, albeit at a softer rate, as raw material scarcity and increased transportation costs continued to exert upward pressure on prices. In a bid to protect margins, manufacturers hiked their selling prices at the sharpest rate in more than two-and-a-half years.
Shreeya Patel, economist at IHS Markit, stressed:
“June data highlighted a partial rebound in the Filipino manufacturing sector following two consecutive months of contraction seen at the start of the second quarter. It was not all good news in June, however, with MECQ measures persisting and, in some instances, delaying the supply of inputs. Meanwhile, rising raw material and transportation costs were often faced by goods producers during the month. Output prices rose further, and at the quickest rate in over two years, suggesting firms are committed to somewhat cushioning any potential losses.”
Author: Alexandros Petropoulos,