By Komfie Manalo
Domestic factories experienced a surge in production in July, and according to S&P Global Market Intelligence, output and orders are expected to continue in the coming months.
In its latest report, the S&P Global Manufacturing Purchasing Managers' Index (PMI) said that the Philippine manufacturing PMI in July stood at 51.2, slightly lower than the 51.3 score in June this year. A score above 50 indicates improvement, while a score below 50 indicates deterioration.
"The second half of the year started modestly, with the Filipino manufacturing sector signaling further upticks in output and new orders," said S&P Global Market Intelligence economist Maryam Baluch.
S&P said demand trends continued to increase across the manufacturing sector, with new orders recording a growth rate faster than June's five-month low.
On the other hand, demand from overseas markets had moderated last month.
Baluch added, "Though in both cases, the rates of increase were weaker than their respective long-run averages, thereby indicating relatively subdued growth across the sector."
With the sustained rise in production, factories' purchasing activities also improved in July.
Factories, likewise, registered growth in employment since April.
"Nonetheless, a historically muted inflationary environment, as indicated by the PMI price gauges, could open the door to policy rate cuts. Easing financial conditions should help solidify and strengthen growth in the coming months," Baluch said.
Meanwhile, manufacturing companies remained optimistic in the next 12 months
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