The local manufacturing sector registered a seven-month high in September this year amid easing community quarantine restrictions in the country, the latest monthly survey of IHS Markit revealed.

The Philippines Purchasing Managers' Index (PMI) increased to 50.1 last month, its highest reading since February, from 47.3 in August, the IHS Markit said in a report.

PMI is an economic indicator derived from monthly surveys of private companies. An index reading above 50 indicates that the economy is generally growing, while below 50 an overall contraction.

Shreeya Patel, IHS Markit economist, said the manufacturing data showed that operating conditions in the Philippines have stabilized at the end of the third quarter.

Patel noted that new business expanded for the first time since February, albeit tentatively, while production levels dropped only slightly.

"According to firms, the ongoing restrictions related to the coronavirus disease (COVID-19) pandemic continued to limit the performance of the sector, with some businesses forced to pare back operations,”

Patel said.

 “On a more hopeful note, stronger business sentiment and efforts to rebuild stocks suggest panellists are preparing for an improvement in demand over the coming months, although optimism continues to rest on the development of the pandemic,” she added,

New orders rose for the first time since February, led by improving customer demand as more parts of the economy reopened following the easing of the COVID-19 infections, but the pace of expansion was only marginal.

 “Survey respondents linked higher sales to the reopening of the economy and firmer client demand. Mirroring the trend seen for total new orders, export sales also expanded in September, thereby ending a six-month sequence,” IHS Markit said.

Despite the upturn in new orders, workforce numbers decreased, extending the current trend of falling employment to seven months.

“Panellists attributed the decline to voluntary resignations, sufficient capacity levels and cost saving measures. Another reduction in backlogs of work highlighted evidence that spare capacity persisted across the manufacturing sector,” IHS Markit said.

Production volumes, however, fell for the third consecutive month in September, but a much slower pace. IHS Markit said there were companies that saw an output growth after production schedules resumed, while there were others that indicated that restrictions continued to hamper their operations.