Factory activity hits 10-month high in November

MANILA, Philippines — The Philippines’ manufacturing activity continued to improve in November, expanding at the fastest pace in 10 months supported by strong demand.

In a statement yesterday, S&P Global said the Philippines’ manufacturing purchasing managers’ index (PMI) rose to 52.7 in November from 52.4 in October.

A PMI reading above 50 indicates an overall increase compared to the previous month, while below 50 means an overall contraction. 

An indicator of manufacturing performance, the PMI is based on a survey of around 400 manufacturers and takes into account the following: new orders, output, employment, suppliers’ delivery times and stocks of purchases. 

“The latest PMI data from S&P Global signaled a further strengthening of the Filipino manufacturing sector in November. Strong demand conditions supported quicker expansions of both new business and output,” S&P Global Market Intelligence economist Maryam Baluch said.

Growth in new orders and output hit  eight and 10-month highs, respectively, amid strong demand conditions both in domestic and foreign markets. 

Baluch said confidence levels in the manufacturing sector strengthened for the first time in three months on expectations demand would continue to improve in the months ahead. 

As backlogs dropped for the fifth month running, S&P Global said some manufacturing firms opted to reduce employment.

Manufacturing firms also cut back on buying activity in November for the first time since mid-2022.

“While these fresh contractions were a slight cause for concern, the downturns were shallow overall and may be reversed if growth momentum is sustained, although global headwinds and sluggish demand from overseas markets could act as downside risks in the coming 12 months,” Baluch said. 

S&P Global said vendor performance in November worsened following two months of improvements, with firms citing material shortages and congestion at ports. 

It said the rate at which lead times were lengthened, however, was moderate overall. 

It also said input price inflation was at its weakest in over three years, leading to a moderate increase in manufacturers’ selling prices. 

For the next 12 months, manufacturers in the country remain optimistic, with 46 percent expecting an increase in output.