The Philippines’ manufacturing output remained on downward trend in November but slowly inching up to stabilization amid renewed signs of recovery momentum, the latest monthly survey of IHS Markit revealed.
The Philippines Purchasing Managers’ Index (PMI) rose from 48.5 in October to 49.9 in November, posting just marginally below the 50 neutral value that separates expansion from contraction.
Shreeya Patel, IHS Markit economist, said the country’s manufacturing sector showed promising signs of renewed recovery momentum in November as the headline PMI figure neared expansion level.
The November PMI showed a considerable easing in the downturn across the manufacturing sector after production rose for the first time since June as foreign demand improved notably from that seen in October.
“Encouragingly, firms registered the slowest drop in employment in the current nine-month sequence of decline despite a steep depletion in backlogs of work,” Patel said.
Nevertheless, she said that path to recovery may not be smooth.
“The health of the sector rests on the number of COVID-19 cases and the impact the virus has on the global economy. Whilst vaccine developments look promising, it is still unclear when restrictions will come to a
complete end,” Patel said.
Although production levels increased, job shedding persisted at a solid rate. IHS Markit said this is an anecdotal evidence suggesting firms had sufficient capacity to meet incoming new orders, and cost saving pressures led to further cuts in workforces.
For the 12-month outlook, IHS Markit said local manufacturing production remained positive in November.
“Recent vaccine developments raised hopes of the passing of the virus over the next year. That said, sentiment moderated from that seen in October, and was still subdued in the context of historical data,” IHS Markit said.
Among six Association of Southeast Asian Nations, the Philippines was tied with Vietnam, but trailed behind Singapore, Thailand and Indonesia, whose indexes were all above the 50 threshold.
The Philippines’ PMI is also slightly below ASEAN’s 50 regional average, but better than Malaysia (48.4), and Myanmar (43.2).