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Philippines: manufacturing rises to 7-mo high
An increase in new orders and export sales helped the Philippines’ manufacturing sector in September reach its highest growth rate in seven months, an IHS Markit survey has found.
Results of the poll showed on Thursday that the country’s seasonally adjusted Purchasing Managers’ Index (PMI) rose to 50.1 last month — the highest since February’s 52.3 — from 47.3 in August.
The PMI takes into account new orders, output, employment, suppliers’ delivery time and stocks. Readings above 50 signal an expansion; below that, a contraction.
According to IHS Markit, new orders rose for the first time since February on improved customer demand due to the continued reopening of the Philippine economy. It said export sales expanded in the seventh month after contracting in the last six.
But despite these improvements, workforce numbers decreased because of voluntary resignations, sufficient capacity levels and cost-saving measures.
“The latest Philippines manufacturing data showed that operating conditions stabilized at the end of the third quarter. New business expanded for the first time since February, albeit tentatively, while production levels dropped only slightly,” IHS Markit economist Shreeya Patel said in a statement.
Production volumes shrank for the third month as restrictions imposed to contain the spread of the coronavirus disease 2019 (Covid-19) continued to hamper activity. The rate of the contraction eased, however.
IHS Markit said manufacturing companies signaled tentative increases in their inventory levels last month. Stocks of inputs and finished goods also grew for the first time in seven months, but marginally.
Cost burdens increased in September on higher transportation costs, material shortages and reports of supplier surcharges related to the Covid-19 pandemic.
“On a more hopeful note, stronger business sentiment and efforts to rebuild stocks suggest panelists are preparing for an improvement in demand over the coming months, although optimism continues to rest on the development of the pandemic,” Patel said.
The Department of Trade and Industry (DTI) welcomed the latest factory data, with its chief Ramon Lopez saying it showed signs the economy was “slowly recovering.”
This “is why there is a need to continue…reopening [the economy] in areas under GCQ (general community quarantine),” Lopez said during a Laging Handa public briefing on Thursday.
Source: https://www.manilatimes.net/2020/10/02/business/business-top/ph-manufacturing-rises-to-7-mo-high/775125/