Easing of measures helped businesses to restart operations.
Philippines’ manufacturing PMI rose to 40.1 in May, from a record low of 31.6 in April, according to IHS Markit’s latest PMI data. Despite the improvement, the reading still shows a sharp deterioration in operating conditions across the manufacturing sector.
Manufacturing conditions across the Filipino goods-producing sector declined steeply in May, whilst output was further stifled by temporary business closures and travel restrictions. Production levels also remained subdued due to lockdown measures.
However, the easing of measures in some regions helped the rate of contraction in production soften from April, as some businesses were able to restart operations.
Nevertheless, employment levels fell sharply, whilst purchases were heavily reduced in May. Businesses largely related the fall to weaker sales and restrictions to output, with many panellists operating with minimal employee numbers.
Further, demand for manufactured goods continued to fall during the month as businesses faced weaker sales from both domestic and international markets. In response, firms continued to pare back on purchasing activity and reduce inventory levels.
However, the drop in inventories of raw materials and semi-finished items eased as some manufacturers raised holdings in anticipation of a nationwide lifting of lockdown measures.
On the price front, Filipino goods producers saw the first rise in input costs for three months in May. The overall pace of inflation was also subdued as firms hoped to attract customers with low prices as demand recovered.
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