Despite the outbreak of COVID-19 taking a hit on manufacturing sectors in many industrialized economies, factories in the Philippines posted a 13-month-high growth in February, London-based global information provider IHS Markit Ltd. said Monday.
The latest IHS Markit Philippines Manufacturing Purchasing Managers’ Index showed that the seasonally adjusted PMI further rose to 52.3 from 52.1 last January.
A PMI score above 50 meant there was an overall increase in manufacturing activity.
“February survey data signalled a continuation of respectful growth across the Philippines’ manufacturing sector. Firms are enjoying resilient demand conditions, both domestically and abroad, with anecdotal evidence suggesting that pipeline work remains sufficient to support the positive production trend in the near term,” IHS Markit economist Joe Hayes said in a statement.
Based on IHS Markit data, exports growth last month was the strongest since July 2018 “amid client wins and the launch of new products.”
Hayes said that while COVID-19 still “poses a downside risk” to domestic manufacturing, the outbreak “seems to have been isolated to the supply-side so far as exports grew at the fastest rate in over one-and-a-half years.”
“That said, panelists indicated that input deliveries out of mainland China had dented stockpiling and slowed the rate at which firms were completing outstanding orders,” Hayes said.
“Given that stocks of purchases have risen strongly in recent months, firms should have appropriate buffers in place to withstand delivery disruptions, but if they continue, production volumes could be adversely impacted,” Hayes added.
IHS Markit said local manufacturers also added more workers last month given their current workloads and anticipated demand, reversing the job cuts in January.
Manufacturing output is expected to continue growing during the next 12 months as “ample pipeline work, aggressive sales targets and expansion plans underpinned the confident outlook,” IHS Markit said.