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PHL leads ASEAN’s manufacturing index in June

The Philippines has recorded the highest manufacturing Purchasing Managers’ Index (PMI) among seven ASEAN countries for the month of June, according to IHS Markit’s Nikkei Manufacturing PMI Report released Monday.

The Philippines’ manufacturing PMI for June this year posted 53.9, but lower than its score in May at 54.3.

“The Philippines manufacturing sector rounded off the second quarter on a strong note, with a solid performance in June,” said IHS Markit Economist Bernard Aw.

Aw noted expansions in output and new business have driven the positive manufacturing PMI for the Philippines in June.

“While the domestic market remained the key pillar of manufacturing growth, there were signs that external demand is contributing more to the expansion. Export order growth strengthened to a three-month high,” he noted.

Following the Philippines in ASEAN’s manufacturing PMI in June was Vietnam posting an index of 52.5, then Thailand at 50.4, Singapore at 50.3, Indonesia at 49.5, Myanmar at 49.4, and Malaysia at 46.9.

PMI is an indicator of the manufacturing sector’s health based on sub-components such as new orders, output, employment, suppliers’ delivery times, and stocks and purchases.

Indices above 50 signal improvement in business conditions while readings below 50 show deterioration.

For the entire ASEAN, the region’s PMI slipped to 50 in June from 50.5 in its previous month.

“The ASEAN manufacturing sector stagnated in June amid waning demand, which is disappointing news after a promising start to the second quarter. After five months of expansion, output across the region was broadly unchanged while growth in total new orders eased further,” Aw noted.

He added that ASEAN is struggling to maintain its manufacturing sector growth.

The economist said despite the increase in exports in June, manufacturing sector stagnated.

“Rising international trade has not noticeably helped regional countries boost their manufacturing activity, despite export sales rising at the fastest rate for four years in June,” Aw said.

“If domestic demand continues to soften, employment prospects will be affected, especially when there is evidence of spare capacity in the sector. That said, the uneven pace of manufacturing development across the region suggests that some ASEAN nations may be more affected than others,” he explained.

Kris M. Crismundo/PNA