Factory activity hits 32-month high in December

January 3, 2025 | 12:00am

Back at pre-COVID-19 level

MANILA, Philippines —  Factory activity in the country ended 2024 on a high note, growing at its quickest pace in over two-and-a-half years, matching its pre-pandemic level, on the back of  robust holiday demand.

In a statement yesterday, S&P Global said the Philippines’ headline purchasing managers’ index (PMI) for manufacturing rose to 54.3 in December from 53.8 in November, the highest gauge of manufacturing activity in 32 months or since April 2022.

PMI, a measure of manufacturing performance, is generated from the survey responses of around 400 manufacturers. It considers the following factors: new orders, output, employment, suppliers’ delivery times and stocks of purchases.

S&P Global noted that both the country’s manufacturing output and new orders rose “sharply” during the last month of 2024, driven by higher demand and greater production requirements.

“The Filipino manufacturing sector ended 2024 on a positive note, with further improvements in demand resulting in sharp and significant increases in new orders and output,” said Maryam Baluch, economist at S&P Global market intelligence.

“Firms also expanded their purchasing activity to meet production requirements,” Baluch added.

Baluch noted that the moderation in inflationary pressures in December also contributed to the growth of the manufacturing sector.

“In fact, cost burdens and output charges rose at historically muted rates,” Baluch said.

Meanwhile, the headline S&P Global Philippines manufacturing PMI expanded for the 16th consecutive month in December to 54.3, up from 53.8 in November, signaling a “strong” improvement in the country’s manufacturing sector.

“Sharp expansions in both new orders and output were reported, supported by anecdotal evidence of robust underlying demand trends, product diversification, and new client acquisitions,” S&P Global said.

“Additionally, there was a renewed rise in demand from international markets, marking the first increase in new export orders in five months,” it added.

Furthermore, growth in production requirements contributed to higher purchasing activity by manufacturers, according to S&P Global.

“Input buying rose sharply and at a rate which was the strongest in nearly two years. Moreover, a sustained increase led to a resumption of pre-production inventory building, following two consecutive months of contraction,” it said.