The growth of the country’s manufacturing sector softened in November, as output and new orders rose at weaker rates and employment levels failed to improve, according to the latest report by IHS Markit.
The IHS Markit Philippines Manufacturing Purchasing Managers’ Index posted 51.4 in November, indicating a moderate improvement in operating conditions in the goods-producing sector.
The report said the headline index was at its lowest level since June, after falling from 52.1 in October.
Key findings of the report showed that production levels rose at the weakest pace since April; new orders grew at solid, but slower rate; and employment stagnated after four months of job creation.
“Growth softened to a modest pace in the Philippines manufacturing sector in November, as firms noted the weakest rise in factory orders since August,” David Owen, economist at IHS Markit, said in the report released yesterday.
“In particular, this led companies to hold back on hiring plans, signaling reduced pressure on capacity as output growth slowed,” he added.
Meanwhile, Owen pointed out that stocks continued to rise, but at a notably subdued rate.
“At the same time, manufacturers looked towards 2020 with improved optimism as growth plans began to take shape. This brought output expectations to the strongest since February,” he said.
The report said manufacturers continued to highlight traffic issues in November, leading to the fourth deterioration in vendor performance in as many months.
“On the price front, input costs faced by Filipino goods producers rose solidly, marking the quickest rate of inflation since February,” the report said.
“According to panelists, this was mainly due to increased raw material prices, in part resulting from higher demand for inputs. Companies that reported a rise in cost burdens often passed this onto consumers with an increase in selling prices,” it added.
IHS Markit said the outlook for manufacturing output improved to a notable extent during November.
“The level of sentiment rose to its highest in nine months, as companies noted that plans for 2020, such as new products and factory openings, led to boosted optimism for the future,” the report said.