The country’s manufacturing sector remained on the growth path, with output rising for the 14th straight month in October, and outperforming the region, according to S&P Global.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI), which measures the country’s manufacturing output, came in at 52.9 in October, the 14th straight month that the index settled above the 50 mark that separates growth from decline.
READ: PH manufacturing output growth eased in August
Th PMI reading may be lower than the 53.7 recorded in September, but it was still the fastest among six Association of Southeast Asian Nations (Asean) member-countries last month, and beat the Asean average of 50.5.
The report also said that this was the second-highest reading since January 2023 and “indicated a historically solid improvement in the sector.”
“October PMI data indicated a slight easing in—but still solid—growth across the Filipino manufacturing sector,” S&P Global Market Intelligence economist Maryam Baluch said in a statement.
A PMI reading above 50 suggests better operating conditions compared to the previous month, whereas a reading below 50 indicates a deterioration.
Job creation
And more notably, Baluch said employment was the “real stand-out” in October, with the rate of job creation the strongest in over seven years.
“Growth in employment allowed firms to work through the slight build-up of backlogs seen in the previous month and also keep up with current production requirements, as outstanding business declined in October,” the report said.
According to the report, while new orders and output in October grew more slowly, they still marked the 14th month of growth for new orders and the seventh month for output.
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This growth was stronger than usual, thanks to an increasing number of customers, which helped drive demand.
Purchasing activity also increased, albeit at a slower pace, as rising raw material prices discouraged companies from buying more inputs.
S&P also said that material shortages and the weakening of the peso against the dollar resulted in increased costs for companies. They also faced higher expenses for labor and shipping.
As a result, the rate of input price inflation rose to the highest level in eight months, leading companies to increase their prices the most since May.
Looking ahead, S&P expressed optimism for the sector as confidence rose to a five-month high, with around half of the surveyed companies feeling positive about the year ahead. INQ