The growth of the manufacturing sector strengthened for the second consecutive month in January even as supply chains were disrupted by the recent Taal volcano eruption and ongoing traffic issues, according to the latest IHS Markit report.
The report released yesterday said the IHS Markit Philippines Manufacturing Purchasing Managers’ Index rose for the second month in a row to 52.1 in January, from 51.7 in December, to signal a moderate improvement in operating conditions at goods-producing firms.
Production levels grew at a notably stronger pace from the previous month, the report said, which was supported by a quicker rise in new orders and the beginning of new contracts.
“Whilst some businesses were notably affected by the Taal volcano eruption in January, for the most part, the Philippines manufacturing sector continued to grow in January.
Operating conditions improved at the joint-strongest pace for a year, with production increasing moderately amid stronger demand for goods,” David Owen, economist at IHS Markit, said in the report.
Owen said in particular, export sales have risen in three out of the past four months, signaling an improving trade climate as US-China relations appear to brighten.
“If this is sustained, sales growth could strengthen further this year,” Owen said.
However, he said one issue heightened by the eruption was road traffic, which has disrupted delivery times in each of the past six months.
“The government is seeking to address this with their ‘Build, Build, Build’ project to place greater investment in road infrastructure. This is clearly an important project for manufacturers, with several pinning confidence around future output onto improved traffic conditions,” Owen said.
