Pandemic, typhoons encumber factory activity amid demand for PH goods
The manufacturing sector ended 2020 on a low note as the purchasing managers’ index (PMI) shrank at a faster pace in December last year amid a prolonged COVID-19 quarantine, London-based global information provider IHS Markit Ltd. said on Monday.
In a report, IHS Markit said the Philippines’ manufacturing PMI worsened to 49.2 last month from 49.9 in November.
A PMI below the neutral 50 mark meant there was a year-on-year decline in manufacturing activities.
“December data was indicative of another contraction in operating conditions across the Filipino goods-producing sector. The pandemic and ongoing restrictions have hit manufacturers hard, impacting both demand and output, which remained historically weak,” IHS Markit economist Shreeya Patel said in a statement.
“The addition of material shortages and supply chain pressures placed pressure on operating conditions, while reduced output led to another month of sharp job cuts,” Patel added.
On top of the quarantine restrictions, IHS Markit also blamed bad weather toward year-end for the drop in output volumes in December, which it said was “among the fastest in the series history.”
On a positive note, IHS Markit said “demand from abroad continued to expand, with exports rising for the fourth month running” as “greater demand for Filipino products in key export markets were reported by panelists.”
Also in December, Patel said “new orders neared stability and sentiment recovered to levels seen before the start of the pandemic.”
Patel noted the number of COVID-19 cases have “moderated” and that the country was expected to further relax restrictions in the next few months.
Still, “[while] the latest overall sector contraction was only marginal, domestic demand remains challenging, which may stymie progress on the lengthy road to recovery,” Patel said. INQ
