The manufacturing sector has stabilized in September, as new orders expanded for the first time since February, a report released yesterday by IHS Markit said.
The IHS Markit Philippines manufacturing purchasing managers’ index rose to 50.1 in September from 47.3 in August, posting just above the neutral 50 mark that separates expansion from contraction.
According to the report, the latest reading was the highest since February and signaled that operating conditions were broadly stable across the goods producing sector.
“New orders rose for the first time since February, led by improving customer demand as more parts of the economy reopened following the easing of coronavirus disease 2019 (COVID-19) restrictions,” the report said.
“At the same time, output contracted at the weakest pace for three months, falling only marginally overall,” it added.
The report however noted that employment continued to fall markedly, which manufacturers often linked to the non-replacement of voluntary leavers and sufficient capacity.
“Nonetheless, business sentiment improved to the highest since February, with upbeat forecasts often attributed to hopes of rising demand and the passing of the COVID-19 pandemic,” it said.
Shreeya Patel, economist at IHS Markit, said according to firms, the ongoing restrictions related to the COVID-19 pandemic continued to limit the performance of the sector, with some businesses forced to pare back operations.
“On a more hopeful note, stronger business sentiment and efforts to rebuild stocks suggest panelists are preparing for an improvement in demand over the coming months, although optimism continues to rest on the development of the pandemic,” Patel said.