The country’s manufacturing purchasing managers’ index (PMI) for November 2021 logged the highest score for the past eight months at 51.7, London-based information and analytics firm IHS Markit reported yesterday.
Philippine manufacturing PMI in November increased from a score of 51 in October amid further easing of coronavirus disease 2019 alert level due to lowering of the number of infections in the country.
“Latest PMI data continued to signal a recovery in operating conditions in the Philippines with the headline figure at an eight-month high,” IHS Markit economist Shreeya Patel said.
IHS Markit’s manufacturing PMI measures the health of the manufacturing sector if it gets better, same, or worse in a month.
The neutral score is 50, and indices above it mean improvement of the industry while below the neutral score reflect deterioration.
The manufacturing PMI covers economic variables such as output, new orders, new export orders, backlog of works, output prices, input prices, suppliers’ delivery times, stock of finished goods, quantity of purchases, stocks of purchases, employment, and future output.
Patel said the better state of Philippine-based manufacturers in November was supported by the expansion of new orders and buying activities of producers to boost production while narrowing decrements in output and shedding of workers.
“Stockpiling and efforts to boost production were a key theme in the latest release, but supply-side issues and the lack of availability of raw materials weighed on production. Voluntary resignations were also of concern with headcounts falling continuously over the last year and a half. Encouragingly though, firms were able to keep backlogs at bay, suggesting that companies, for now, are dealing with labor shortages,” she added.
Input costs rose in November with a surge linked to higher prices of raw materials, transportation, and energy costs, causing firms to pass the higher expenses to consumers by increasing selling prices.
Manufacturers remained optimistic for the next 12 months, with a degree of market confidence at a 21-month high “with hopes of a return to normality and greater demand”.
The IHS Markit’s manufacturing PMI is also part of the National Action Plan Phase IV scorecard of the Philippine government, as this is one of the indicators of socioeconomic recovery.
The National Economic Development Authority sets the normalizing value for manufacturing PMI at 52.3, which was the peak score prior to the pandemic.*PNA