Philippines: Manufacturing PMI rises in October
The IHS Markit Manufacturing Purchasing Managers’ Index (PMI) rose to 51.0 in October from September’s 50.9. October’s result marked the strongest reading since March. As a result, the index moved further above the 50-threshold, signaling a faster improvement in business conditions compared to the previous month.
The higher reading owed itself to a reduction in the rate of decline in employment and a stabilization of new orders. A gradual lessening of Covid-19 restrictions largely drove the improved figures. However, inventory growth was slightly lower, while output fell at a slightly quicker rate. Meanwhile, delivery times lengthened notably, driven in part by ongoing global supply shortages. On the price front, input price inflation reached a more than three-year high, while selling prices increased, albeit modestly. Finally, firms’ expectations hit a three-month high, though they remained subdued nonetheless.
IHS Markit’s Shreeya Patel commented on the reading:
“October PMI data signaled a slight pick-up in growth across the Philippines manufacturing sector. Some restrictions continued to ease, and the demand environment showed tentative signs of improvement with new orders stabilizing after six months of decline. However, the goods producing sector was yet again hit by delivery delays, material shortages and rising costs, which consequently inhibited output growth. Such pressures are likely to persist over the next few months, but a key concern comes from firms only partly able to pass on higher costs given the relatively weak demand environment.”