Philippines: Manufacturing PMI deteriorates in August
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, edged down to 46.4 in August, following July’s 50.4. Thus, the PMI passed below the crucial 50-threshold, signaling a deterioration in manufacturing sector conditions compared to the previous month.
The decline owed itself largely to contractions in output and new orders, due to the reintroduction of Enhanced Quarantine Measures (ECQ) in the Metro Manila area, which forced businesses and factories to close. This marked the fifth successive month in which output fell. Meanwhile, weak demand led to a reduction in inventory levels and employment, with staffing levels decreasing for the eighteenth month running, which further compounded the decline. Finally, Covid-19 restrictions and supply shortages both led to a significant increase in delivery times. On the price front, input and output cost inflation softened from last month, whilst firms’ expectations rose to a four-month high.