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Philippines: Factory activity hits 3-month low in February
MANILA, Philippines — The growth in Philippine manufacturing activity eased to a three-month low in February amid supply chain concerns and higher costs.
In a report released yesterday, S&P Global said the country’s purchasing manager’s index (PMI) remained on expansion mode but slowed to 52.7 in February from 53.5 in January.
“The latest reading signaled the softest improvement in operating conditions in three months,” S&P Global said.
A reading above 50 means expansion, while below 50 indicates a decline.
The PMI reading is based on a survey of around 400 manufacturers and takes into account the following: new orders, output, employment, suppliers’ delivery times and stocks of purchases.
S&P Global Market Intelligence economist Maryam Baluch said “ongoing supply chain concerns continued to remain a drag on the sector.”
In addition, she said material scarcity and difficult logistics conditions led to longer average lead times.
Higher prices, which pushed up operating expenses, also affected the performance of the manufacturing sector.
In January, the headline inflation rate accelerated to 8.7 percent, the highest since the 9.1 percent in November 2008, due to faster upticks in food and utility costs.
S&P Global said both output and new orders grew in February, although at a slightly slower pace.
As production requirements increased at a softer pace in February, Baluch said employment in the manufacturing sector dipped slightly for the first time in three months.
In terms of manufacturing firms’ purchasing activity, the February data indicated a softer increase in acquisition of raw materials and semi-finished goods.
While there are challenges, Philippine manufacturing firms continue to have a positive outlook for the year, with half of the respondents expecting to post higher output in the coming 12 months.
“Despite the ongoing supply-side challenges and an uncertain international climate, the Filipino manufacturing sector has remained resilient, benefitting greatly from domestic demand. Firms hope that the buoyancy in the market is maintained as we progress further into the year,” Baluch said.
Source: https://www.philstar.com/business/2023/03/02/2248567/factory-activity-hits-3-month-low-february