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The Philippine manufacturing sector posted steady improvement in August 2024, according to S&P Global
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The headline Philippine Manufacturing Purchasing Managers Index was unchanged from July, at 51.2 in August
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Underlying data signaled improved demand trends, with Filipino goods producers recording the strongest uptick in new orders in three months
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Export sales fell for the first time this year, indicating demand was domestically driven
The Philippine manufacturing sector posted steady improvement in August 2024.
The headline Philippine Manufacturing Purchasing Managers Index – a composite single-figure indicator of manufacturing performance – was unchanged from July, posting again at 51.2 in August, according to the latest survey of S&P Global.
READ: PH manufacturing index down slightly in July
The index showed manufacturing “strengthened in successive months for a year, albeit with latest data signaling only a modest improvement,” S&P Global noted.
Underlying data signaled improved demand trends, with Filipino goods producers recording the strongest uptick in new orders in three months.
Demand from foreign customers, however, faltered in August, as new exports sales fell for the first time since the start of the year.
S&P Global said the data suggests demand was domestically driven.
Nonetheless, overall growth in new orders supported a stronger uptick in output during August.
The rate of growth quickened from July’s four-month low and was broadly in line with the historical series average.
Growth in business requirements supported firms’ decisions to increase purchasing in August. That said, the rate of increase softened to a five-month low and was modest overall.
The slowdown in buying activity was reflected in a softer build-up of pre-production inventories held at manufacturers. The upturn was slight and the weakest in the current six-month period of accumulation.
Meanwhile, postproduction inventories were depleted in August, the first downtick noted since February followed five consecutive months of stock building.
Turning to employment, the uptick seen in July was reversed in August. Contractions have now been noted in three of the past four survey periods. Moreover, the tenacity of goods producers to complete workloads efficiently, despite a contraction in workforce numbers, highlighted sufficient capacity. Encouragingly, inflationary pressures were curbed further.
Input costs rose moderately during the latest survey period.
Meanwhile, selling prices for goods were raised at a softer and only a slight pace, indicating that firms are in part absorbing costs in a bid to boost sales and remain competitive.
Firms also registered a further lengthening of lead times for inputs received from suppliers.
Vendor performance deteriorated for a fourth straight month, but the latest incidence of delays was the least pronounced since May. Finally, expectations among firms in the Filipino manufacturing sector point to further expansions in output in the coming 12 months, with the respective index printing well above the neutral 50.0 mark. However, latest data revealed a dip in the level of confidence, thereby suggesting more modest production gains are anticipated compared to those seen in July.
