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Philippines PMI November 2019

Philippines: Manufacturing PMI notches down in November

The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, moderated to 51.4 in November from 52.1 in October. Nevertheless, the index remained above the 50-threshold that separates expansion from contraction in the sector.

The softer expansion in the manufacturing sector in November came against the backdrop of the weakest rise in production since April. Moreover, new orders growth also slowed, largely due to new export orders falling for the fifth time in six months, whereas domestic demand remained robust. Weaker new business fed through to employment, with hiring activity stagnating in the month. Meanwhile inventories rose at a more moderate pace, while purchasing activity eased as well. On the supply side, delivery times continued to increase due to traffic issues.

On the price front, input cost inflation rose at a quickest pace since February on higher raw material prices amid shortages. Many producers subsequently raised output charges, albeit modestly.

On a brighter note, manufacturers’ confidence rose to a nine-month high in November, on an optimistic outlook for new product lines and factory openings in 2020.

Commenting on the latest survey results, David Owen, economist at IHS Markit, stated:

“Growth softened to a modest pace in the Philippines manufacturing sector in November, as firms noted the weakest rise in factory orders since August. In particular, this led companies to hold back on hiring plans, signalling reduced pressure on capacity.”

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