IHS Markit: PH manufacturing growth recovers in October as inflation eases

MANILA, Philippines — Manufacturing growth recovered in October partly on easing inflation of production costs, the latest IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI) released Monday showed.

The seasonally adjusted PMI inched up to 52.1 last month from 51.8 in September, reversing two straight months of decline.

Global research firm IHS Markit said October’s reading was the same as July’s – the highest so far this year.

A PMI score above 50 reflected an overall increase in manufacturing activity.

In a separate report, IHS Markit said that in Asean, only the Philippines and Myanmar posted improved PMI last month, bucking the downward trend in most other countries in the region.

But IHS Markit economist David Owen said the improved October PMI reading for the Philippines “signaled little change in the rate of improvement in operating conditions from September.”

“Production expanded at a slightly quicker rate, alongside a marginal uptick in the pace of new order growth. On the other hand, employment rose at a slower rate, while the stock of purchases grew to the least extent for three months,” Owen said.

Owen nonetheless said, “a stand-out from October data was a further fall in the pace of output charge inflation, which reached the weakest since January 2016.”

“Despite a solid rise in cost burdens, many firms looked to keep prices unchanged in order to maintain a strong market environment,” Owen added.

“Business expectations dropped to the lowest in the series history. However, with a good proportion of firms still expecting activity to rise in the year ahead, the overall outlook remained positive,” according to Owen.