Recovering manufacturing faces risks from ‘resignations’
With the economic reopening reinvigorating consumer demand, the Philippines’ purchasing managers’ index (), an indicator for manufacturing sector growth, hit an eight-month high in November.
In a report on Wednesday, global information provider IHS Markit said PMI further rose to 51.7 last month from 51 in October. A reading 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 outturn signaled manufacturing recovery following months of contraction, especially when the country reverted to the most stringent of lockdowns, which had stopped some manufacturing activities of nonessential goods.
Domestic manufacturers’ output remained lower than prepandemic levels, yet Patel said the decline in November was the slowest in eight months.
As a whole, the industry is gaining ground. External factors amid global supply chain challenges, however, 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.”
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