Tuesday, December 12, 2023

Domestic Demand Backs PH Manufacturing In September


Domestic Demand Backs PH Manufacturing In September

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The S&P Global Manufacturing Purchasing Managers’ Index (PMI) reported Monday that the country’s manufacturing performance in September this year has improved, supported by domestic demand.

The latest index shows that the Philippines manufacturing PMI last month posted a score of 50.6, which is above the neutral level of 50. This is a rebound from the 49.7 PMI in August.

“September PMI data signaled renewed growth across the Filipino manufacturing sector as new orders emerged out of contraction territory, thereby supporting a quicker expansion in output and a fresh rise in staffing levels,” S&P Global Market Intelligence economist Maryam Baluch said.

Supporting the industry’s performance in September were the growth in new orders fueled by domestic demand, offsetting the drop in orders from abroad.

Hiring activities in the manufacturing sector also grew in September, arresting three straight months of decline.

It added work backlogs also fell since July this year, suggesting there is still spare capacity within the sector.

Inventory of finished goods also increased as manufacturers anticipate greater demand in the coming months.

On the other hand, pre-production stocks declined in September as factories utilized available inventories to meet the current requirements.

“Despite increase in material, fuel and supplier costs exerting pressure on operating expenses and pushing up selling prices at a faster pace, both input prices and output charges rose at historically muted rates,” Baluch said.

Meanwhile, manufacturers’ sentiment dropped to a 15-month low in September amid global headwinds.

“Global headwinds, including muted foreign demand conditions, weighed on overall growth in September, with mounting concerns regarding the sustainability of future demand reported by firms. Nonetheless, firms sought to expand staffing numbers despite signs of spare capacity amid hopes of further pickups in new orders,” Baluch added. (PNA)

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