MANILA, Philippines—With economic reopening in full swing and consumer demand reinvigorated, the Philippines’ purchasing managers’ index (PMI) — a proxy for manufacturing sector growth — hit an eight-month high in November.
In a report on Wednesday (Dec. 1), global information provider IHS Markit said PMI further rose to 51.7 in November from 51 in October. An index above 50 meant overall manufacturing activities expanded.
“Business conditions in the Philippines manufacturing sector continued to strengthen. Demand expanded for the first time in eight months, while output neared stability,” IHS Markit said.
IHS Markit economist Shreeya Patel said the November numbers signaled manufacturing recovery following months of contraction, especially when the country reverted to the most stringent lockdowns which halted manufacturing of non-essential goods.
While domestic manufacturers’ output remained lower than pre-pandemic levels, Patel said the decline in November was the slowest in eight months.
But while domestic manufacturing was rising, external factors amid global supply chain challenges remained a concern. “Stockpiling and efforts to boost production were a key theme in the latest release, but supply-side issues and the lack of availability of raw materials weighed on production,” Patel said.
A still fragile recovery also continued to affect manufacturing workers, Patel said. “Voluntary resignations were of concern, with head counts falling continuously over the last year-and-a-half. Encouragingly though, firms were able to keep backlogs at bay, suggesting that companies, for now, are dealing with labor shortages.”
For Patel, “low vaccination rates remain one of the sector’s largest threats.” At least one-third of the Philippine population was already fully vaccinated, but this was among the lowest in the region. The government wanted to ramp up mass inoculation to achieve herd immunity and avoid a return to lockdowns if COVID-19 infections surge with the emergence of the Omicron variant.