The manufacturing sector’s operating conditions continued to improve in February, with output and new orders posting a modest increase, according to a report released by IHS Markit yesterday.
The IHS Markit Philippines manufacturing purchasing managers’ index (PMI) remained at 52.5 in February, posting above the 50 neutral value that separates expansion from contraction.
The report said the latest reading signaled a solid uptick in operating conditions, with the rate of growth matching that seen in January.
“Latest PMI data shows further progress across the Filipino manufacturing sector, with another solid overall expansion recorded during February. Output and new order growth persisted, whilst an acceleration in pre-production inventories suggests a commitment towards greater production in the months ahead,” Shreeya Patel, economist at IHS Markit, said.
“In addition, the rate of job shedding eased to the softest in 12 months,” Patel added.
The report said output and new order volumes rose moderately, with firms mentioning the resumption of business at client firms following easing restrictions.
Looking ahead, the report said expectations regarding output in the year ahead remained positive overall.
It noted improvement in the degree of optimism from that seen in January, with firms often mentioning hopes of a return to normality; however, sentiment posted far below the long-run series average, suggesting there are still some concerns regarding output over the next 12 months.
“That said, COVID-19 (coronavirus disease 2019) continues to pose a large threat with material shortages and transportation delays as a result of pandemic restrictions. Exports were also hard-hit with overseas demand heavily subdued during February,” Patel said.
“For now, controlling the COVID-19 pandemic remains at the heart of the Philippines’ agenda, and whilst vaccines have been secured, delivery delays have severely hindered efforts to vaccinate the nation. Policy-makers will however welcome the sustained improvement in manufacturing operating conditions during February,” Patel added. – Angela Celis