THE Philippine manufacturing sector ended 2024 on a high note, registering its strongest growth in over seven years, S&P Global said on Thursday.
The purchasing managers’ index (PMI) for the sector rose for the 16th straight month to 54.3, up from November’s 53.8 and the highest since November 2017’s 54.8. It also matched the reading in April 2022.
PMI readings above 50.0 point to growth, while those below are a sign of a contraction.
“The two largest components of the PMI calculation (the Output Index and New Orders Index) positively influenced the headline figure in December,” S&P Global said.
Output and new orders grew at the fastest pace in 32 months, driven by strong domestic demand, product diversification and new client acquisitions.
International demand also rebounded, S&P Global said, with new export orders increasing for the first time in five months.
In response to rising demand, manufacturers’ purchasing activity grew at the sharpest rate in nearly two years, supporting inventory growth after two months of contraction.
Employment saw a slight decline, however, ending a three-month streak of job creation. This was said to be due to improved production efficiency, allowing firms to meet rising orders without additional workforce expansion.
“While production efficiency allowed manufacturers to stay on top of tasks at hand, it also led to a slight drop in employment, thereby ending a three-month streak of job creation,” S&P Global economist Maryam Baluch noted.
“However, this could be a temporary blip, especially if demand remains resilient as anticipated throughout 2025,” she added.
Despite some supply chain challenges, such as vendor delays caused by increased purchasing activity and logistical issues, S&P Global said that manufacturers also expressed confidence in expanding output in 2025.
“[F]irms remained confident that output would rise over the coming year, amid hopes that demand trends will strengthen further and plans to launch new products,” it said.
“That said, the degree of confidence slipped notably to a four-month low.”
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