PH manufacturing performance hits 7-year best

A factory in the Philippines (INQUIRER FILE PHOTO)

MANILA, Philippines — The typical surge in demand during the holiday season helped local manufacturers cap 2024 on a positive note, with the sector’s health reaching its best shape in over seven years in December.

A monthly survey of around 400 companies showed the Philippines’ Purchasing Managers’ Index (PMI), a gauge of manufacturing performance, went up to 54.3 in the final month of 2024, from 53.8 back in November, S&P Global reported on Thursday.

The latest reading not only marked the 16th consecutive month that the PMI had settled above the 50-mark that separates growth from contraction, it was also the strongest result since November 2017.

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Maryam Baluch, economist at S&P, said local producers saw “further improvements in demand” amid a “sharp and significant” increase in new orders.

That, in turn, ramped up the production of output. To note, output and new orders are the two largest components of the PMI calculation.

“The Filipino manufacturing sector ended 2024 on a positive note,” Baluch said in a commentary. “Firms also expanded their purchasing activity to meet production requirements.”

READ: PH manufacturing sector growth hit 2-year high in September

Job cuts

But the growth in manufacturing activity did not translate to more jobs.

S&P said companies made a “minor reduction” to their head count, snapping three consecutive months of job creation. Survey results showed the rate of backlog depletion was sharp and the most pronounced in 13 months due to production efficiency, allowing firms to cut payroll costs.

Baluch nevertheless said the job shedding might be a “temporary blip,” especially if demand remains resilient “as anticipated throughout 2025.”