The operating conditions of the Philippine manufacturing sector registered sustained growth in November, according to a report released yesterday.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index registered above the neutral 50 threshold for the 10th month running, indicating an improvement in the health of the manufacturing sector.
Up fractionally to 52.7 in November from 52.6 in October, the headline figure signalled a modest rate of growth, the report said.
The report said growth stemmed from greater demand which resulted in quicker expansions in production levels and factory orders.
Buying activity also increased at a faster pace during November.
“The improvement across the sector primarily stemmed from greater demand conditions which drove higher sales and output,” Maryam Baluch, economist at S&P Global Market Intelligence, said.
However, the seasonally adjusted Employment Index fell below the no-change 50 mark, to signal the first slide in workforce numbers since March, the report said.
“While the manufacturing sector has shown strong gains during 2022, elevated price pressures pose an ongoing threat. Coupled with supply-chain issues, the peso weakening against the dollar adds further fragility. To curb inflation rates, Bangko Sentral ng Pilipinas raised interest rates by 75 base points during November,” Baluch said.
“As the manufacturing sector has heavily relied on demand to help boost growth, the rise in rates, with the prospect of further potential monetary tightening, could impact customer spending. Nonetheless, firms remain strongly upbeat in the outlook for output for the coming 12 months,” Baluch added.
The report said looking ahead, business expectations remained strongly optimistic as nearly two-thirds of panelists were hopeful of growth in output in the coming 12 months.
Moreover, the degree of confidence strengthened, and the report said this was often linked to greater client activity, the economy opening up and more firms undertaking new projects.
