DOMESTIC manufacturing conditions continued to improve last month, S&P Global Market Intelligence reported on Thursday, driven by increased output and stronger order growth.

The Philippine Purchasing Managers' Index (PMI) for the sector rose to 52.2 for April, up from March's 50.9. Results above 50 point to growth, while those below indicate a contraction.

"The latest reading indicated the strongest improvement in operating conditions across the Filipino manufacturing sector in five months," S&P Global said.

Increased demand and production expansions were said to have prompted firms to raise purchases and inventories, with employment also rising during the survey period.

Inflationary pressures also weakened, which allowed domestic manufacturers to keep prices steady.

Growth in new orders was said to be the fastest since October, with those from abroad rising for a third straight month.

The consequent rise in production, S&P Global said, "was the most pronounced in four months and solid overall."

Purchasing growth, meanwhile, was the fastest in nine months, and stockpiling also accelerated — pre- and post-production stocks were said to have "accumulated at fastest paces in 12 and 17 months, respectively."

Employment rose for a third straight month, although the pace slowed from March.

Greater workforce numbers enabled Filipino manufacturers to manage their workloads effectively, but the rapid growth in new orders has led to increased pressure on capacity, causing some firms to face work completions.

Consequently, the rate at which backlogs were being cleared was the slowest since August 2023.

As for prices, cost burdens continued to increase but relatively soft input price growth meant that manufacturers' charges were broadly unchanged.

Sentiment across the manufacturing sector was mostly positive, with a quarter predicting growth.

Optimism, however, fell to a four-year low.

Commenting on the PMI data, S&P Global economist Maryam Baluch said that "building on growth seen in the first quarter of the year, the Filipino manufacturing sector showcased further gains in April."

"With production requirements rising, hiring and purchasing activity remained in growth territory. Moreover, stockbuilding became more widespread in anticipation of greater future output," she added.

"Meanwhile, prices data indicated a relatively subdued inflationary environment, which also is likely to help support growth in the coming months as firms were able to price more competitively."