Philippines: Manufacturing sector grows on robust demand in April
May 2, 2018
The manufacturing Purchasing Managers’ Index (PMI) rose to 52.7 in April, up from 51.5 in March, according to a release provided by Nikkei and IHS Markit. The PMI thus moved further above the critical 50-point threshold that separates expansion from contraction in the manufacturing sector.
The manufacturing sector started the second quarter on solid footing on the back of a robust expansion in new order growth, which grew at the fastest pace in four months. Firms reported healthy domestic and foreign sales, with foreign sales expanding robustly. In response, output also grew at the fastest clip in four months. Healthy production fed through to job creation; employment growth rebounded from a contraction in March.
On the price front, input prices rose due to higher global commodity prices and the ongoing impact from new excise taxes. Inflation eased slightly from March’s historical record but remained elevated nonetheless. This led firms to hike selling prices at the second fastest rate in the history of the survey. Meanwhile, businesses were less optimistic about future expectations in April, but remained confident about new product launches and planned business expansions.
Commenting on the release, Bernard Aw, Principal Economist at IHS Markit, noted that:
“Overall, it’s clear that underlying demand has improved, partly supported by stronger export sales. With companies’ optimism remaining high, despite the dip in April, it looks likely that growth may well accelerate further in coming months.”
Philippines Manufacturing Forecast
FocusEconomics Consensus Forecast panelists see manufacturing rising 7.6% in 2018, which is up 0.7 percentage points from the previous month’s estimate. For 2019, the panel expects manufacturing to increase 7.0%.
Author: Lindsey Ice, Economist