The country’s manufacturing sector posted a rebound in January after three consecutive months of decline, according to a report released by IHS Markit yesterday.
The IHS Markit Philippines manufacturing purchasing managers’ index rose to 52.5 in January from 49.2 in December, posting above the 50 neutral value that separates expansion from contraction.
The report said the latest reading signaled a solid uptick in business conditions, indicating a move towards a recovery from the downturn by the onset of the coronavirus pandemic.
Improving customer demand led to an uptick in output and new orders while purchasing activity rose for the first time in 11 months, it said, adding that in anticipation of further gains in demand, stocks of purchases and post-production inventories rose marginally.
“January data indicated a rebound in operating conditions across Filipino manufacturing sector after three successive months of decline. Productions volumes rose solidly, while renewed growth in new orders indicated an overall improvement in demand conditions,” Shreeya Patel, economist at IHS Markit, said.
“An increase in purchasing activity and stocked inventories was also a positive sign that manufacturing companies expect demand to grow over the coming months,” Patel added.
The report said sentiment regarding output over the next 12 months remained positive with improving new order volumes fueling optimism.
HIS said cost-saving efforts contributed to further staffing cuts at the start of 2021.
“Signs of fragility remained evident with staffing cuts and sharp cost pressures mounting.
At the same time, virus-related restrictions contributed to substantially longer delivery times and subdued foreign demand,” Patel said.
“Business are hoping for a successful and swift vaccine roll-out plan, which is scheduled to begin during the first quarter. Until then, restrictions are likely to stay in place as policy makers seek to contain virus case numbers,” Patel added.