November 5, 2024 | 12:00am
MANILA, Philippines — The country’s manufacturing activity expanded at a slower pace in October from the previous month due in part to disruptions from Severe Tropical Storm Kristine.
In a statement, S&P Global said the Philippines’ purchasing managers’ index (PMI) for manufacturing fell to 52.9 in October from September’s 27-month high of 53.7.
Despite easing from the previous month, the October PMI is the second-highest reading since January last year.
PMI, an indicator of manufacturing performance, is generated from a survey of around 400 manufacturers and covers the following: new orders, output, employment, suppliers’ delivery times and stocks of purchases.
A PMI reading above 50 PMI indicates an increase compared to the previous month, while below 50 reflects a decline.
“The October PMI data indicated a slight easing in – but still solid – growth across the Filipino manufacturing sector,” S&P Global Market Intelligence economist Maryam Baluch said.
Baluch said the increase in new orders in October allowed manufacturers to raise their output, although the rates of growth for both eased from the previous month.
Growth in new orders also enabled manufacturing firms to expand the workforce, with the rate of job creation in October the strongest in over seven years.
Baluch said firms, however, faced supply-side challenges, with material shortages leading to longer delivery times and cooling buying activity.
Manufacturers also saw higher input costs due to material shortages and the peso’s depreciation against the dollar.
In addition, manufacturers also reported higher labor and logistics costs.
Nonetheless, Baluch said manufacturing firms in the country continue to have a positive outlook, with more than half of respondents expecting expansion in the year ahead.
For his part, Rizal Commercial Banking Corp. chief economist Michael Ricafort said the lower PMI reading may be “partly due to some storm or flood or typhoon disruption during the month.”
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