Manufacturing growth accelerates in June

The Recovery Of The Manufacturing Sector Accelerated To Its Fastest Pace This Year In June, On Growing Business Confidence In Japan And Softening Oil Prices, According To The The Asian Centre For Enterprise Development Inc.

In an e-mail to this reporter, Ascend said the purchasing managers’ index rose 2.8 points from 54.66 in May to 57.50 last month, marking its second consecutive expansion after contracting in April.

An index of more than 50 represents growth in the manufacturing sector, while a reading under 50 signifies a contraction. A reading at 50 indicates no change.

“The uptrend in May, from a contraction in April, and a strong showing in June at 57.5 suggest that industries have adjusted to the effects of external conditions particularly the economic slowdown in Japan and the Middle East crisis,” said Ascend, the research arm of the Philippine Institute of Supply Management, which issues the PMI.

The PMI has been above the growth threshold for the year except in April when the index fell below the threshold because of the disaster in Japan and the political crises in the Middle East.

Four major composite variables of the PMI expanded in June, led by new orders and production, which rose 6.4 points. Supplier deliveries went down by 2.8 points, but remained above the growth threshold.

Five of the 12 sub-sectors of manufacturing registered month-on-month declines, such as food and beverages, textiles, paper, non-metallic minerals and basic metals.

Of the 365 respondents, about 55 percent said conditions remained the same, while 31 percent said conditions improved. About 9 percent said they suffered a contraction in business activities.

The retail and wholesale index stayed at a higher growth mode in June at 57.1, well above the growth threshold but 3.7-index points lower than the previous month.

The RW Index has stayed above the threshold since February 2010.

The Retailer Index went down to 57.10 last month from 62.20 in May, while the Wholesale Index dipped to 58.7 from 59.4 over the same period.

The Services Index inched up 0.57 to 64.72 in June.

The consolidated index, comprised of the manufacturing, retail and wholesale, and services sectors, inched up to 59.81 in June from 59.64 in May, continuing an expansion seen since October last year. –Krista Angela M. Montealegre, Reporter, Manila Times