Manufacturing output likely gained momentum in May after a sharp slowdown in April but remained far behind the double-digit pace of a year earlier, the economic research arm of Moody’s Investors Service said in its latest weekly outlook.
The Philippine Statistics Authority (PSA) is expected to release the preliminary May manufacturing output data next week.
Moody’s Analytics said it expects the figures to show that manufacturing output rose 3.5 percent in May after growth slowed to 1.4 percent in April.
Comparative output from May last year surged 12.7 percent year-on-year.
“Industrial production in the Philippines likely enjoyed a partial rebound in May, after sharply cooling to 1.4 percent year-on-year in April,” Moody’s Analytics said.
The firm said the bottoming out of oil prices has helped chemical production, while improvements in US demand have lifted manufacturing.
“Higher government spending in coming months will lift domestic demand and, in turn, food production, the highest component of the survey,” it also said.
In April this year, manufacturing growth as measured by the Volume of Production index (VOPi) decelerated drastically to 1.4 percent from a revised 16.1 percent surge in March and a 10.8 percent increase in April 2014.
Growth in April came mainly from 13 major sectors, led by chemicals, tobacco, furniture and fixtures, basic metals, textiles, printing, machinery except electrical, paper and leather products, as well as beverages.
Offsetting these increases, however, were the heavily weighted sector of petroleum products, which registered the largest drop of 34.6 percent, the PSA said.
Other sectors that reported two-digit declines were miscellaneous manufactures, food manufacturing, wood and wood products.