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Philippines: Export slowdown threatens global manufacturing growth
MANILA, Philippines — Global manufacturing has remained resilient, but stalling export growth threatens to weaken production capacity, an international research firm said.
In a new research report, London-based market intelligence firm IHS Markit said even as output had been holding up last month, factories worldwide have been reporting that exports and purchases continued to be dogged by supply delays.
This was worsened further by logistics delays and transportation issues, it said.
The global Purchasing Managers’ Index (PMI) edged lower from 53.8 in December to 53.5 in January, indicating that conditions are still stable with increases in output and new orders although at slightly slower rates.
“Global manufacturing remained encouragingly resilient in January despite rising COVID-19 infection rates and fresh lockdown measures in many countries, according to the latest PMI survey data,” said IHS Markit.
“However, export growth slowed close to stalling, dampening production growth compared to prior months, with an especially notable renewed fall in exports out of mainland China.”
The Philippine manufacturing sector returned to growth territory in January, supported by recovery in domestic demand.
The headline Philippine PMI rose from 49.2 in December to 52.5 in January, the highest reading in 25 months and firmly above the neutral 50 mark that separates expansion from contraction.
Respondents to the PMI survey mentioned that a recovery in domestic demand drove the uptick because orders from overseas contracted due to strict pandemic restrictions in key export destinations.
In January, the Philippines was among the handful of countries that saw renewed growth in the manufacturing sector.
As of December, official data showed that Philippine exports contracted anew in December after registering positive growth in November, reflecting slower global economic recovery.
The Philippine Statistics Authority reported that the country’s total export sales declined at an annual rate of 0.2 percent in December to $5.74 billion, coming from a four percent growth in November during which exports were valued at $5.8 billion.
Month-on-month, earnings from outbound shipments declined by 1.9 percent in December.
Economists attributed the renewed decline in exports amid the Christmas season to the slower recovery in the global economy, especially in major markets after spikes in new COVID-19 cases in the latter part of 2020 led to lockdowns.
Exports to China, one of the country’s largest trade partners, also weakened during the period.
“An area of concern is export growth, which came close to stalling after four months of expansion, suggesting that trade has become less of a driving force for the global manufacturing economy,” said IHS Markit.
“However, much of the weakening export performance could be attributable to mainland China.”
IHS Markit said anecdotal evidence showed that weakness in China’s exports may stem partly from “widespread shipping container shortages,” and virus-related restrictions.
Source: https://www.philstar.com/business/2021/02/09/2076247/export-slowdown-threatens-global-manufacturing-growth