PMI: PHL manufacturing outpaces most of ASEAN

Philippine manufacturing growth outpaced most of the region anew in October, the most recent Purchasing Managers Index (PMI) data showed. Manufacturers, however, showed weaker optimism for the coming months as the rest of the region’s manufacturing sector slumps.

Global think tank IHS Markit on Monday reported that the country’s PMI hit 52.1 in October, up from 51.8 in September. This is the highest reading of the country since July this year when it also hit 52.1.

The PMI is a composite index meant to gauge the health of the country’s manufacturing sector. It is calculated as a weighted average of five individual subcomponents. Readings above the 50 threshold signal a growth in the manufacturing sector while readings below 50 show deterioration in the industry.

“Posting at 52.1 in October, the IHS Markit Philippines Manufacturing PMI signaled little change in the rate of improvement in operating conditions from September. Production expanded at a slightly quicker rate, alongside a marginal uptick in the pace of new order growth. On the other hand, employment rose at a slower rate, while stock of purchases grew to the least extent for three months,” IHS Markit economist David Owen said.

The Philippines was the only other country to report an uptick during the period, with Myanmar leading the pack with a PMI reading of 53. Coming in next to the Philippines is Thailand and Vietnam with a PMI reading of 50.

“A standout from October data was a further fall in the pace of output charge inflation [of the Philippine manufacturing sector], which reached the weakest since January 2016. Despite a solid rise in cost burdens, many firms looked to keep prices unchanged in order to maintain a strong market environment,” Owen said.

Malaysia, on the other hand, reported a deterioration in business conditions to hit a PMI reading of 49.3. Indonesia’s headline index fell to a near four-year low of 47.7. Singapore ranked last, with the latest headline figure of 41.4 hitting the lowest in the survey history since August 2012.

The headline PMI fell from 49.1 in September to 48.5 in October. IHS Markit said this signalled a deterioration in operating conditions across the Asean manufacturing sector for the fifth consecutive month.

“Overall, the Asean manufacturing sector continued to struggle in October, with operating conditions deteriorating at the sharpest rate for nearly four years,” the report read.

Owen, however, said the outlook among manufacturing companies in the Philippines weakened further, setting a new record low for the survey.  “Business expectations dropped to the lowest in the series history.

However, with a good proportion of firms still expecting activity to rise in the year ahead, the overall outlook remained positive,” Owen said.

“While some firms were downbeat, many panelists remained optimistic toward future output levels due to sales growth, new products and store openings,” the report added.

Source: BusinessMirror