MANILA -- The local manufacturing sector's purchasing managers’ index (PMI) increased to 52.1 in January from 51.7 in December 2019, IHS Markit reported Monday.
This is the second consecutive month that the manufacturing sector recorded a positive growth.
“Operating conditions improved at a joint-strongest pace for a year, with production increasing moderately amid stronger demand for goods,” IHS Markit Economist David Owen said.
Owen said exports sales are rising reflecting the improving trade climate between China and the United States. If this continues, sales growth of factories is expected to strengthen further this year.
However, hiring activity of producers declined despite the increase in output and new orders.
“Several companies mentioned not replacing workers that had resigned, offsetting firms that hired additional labor,” the report said.
With the Taal Volcano eruption last month, the IHS Markit report said this could disrupt supply chains.
“Manufacturers reported a sharp deterioration in supplier performance mainly due to Taal volcanic eruption mid-way through the month that led to further traffic problems of vendors,” it added.
Meanwhile, business confidence of firms for the next 12 months has improved in the January report.
“The government is seeking to address this with their ‘Build, Build, Build’ project to place greater investment in road infrastructure. This is clearly an important project for manufacturers, with several pinning confidence around future output onto improved traffic conditions," Owen noted. (PNA)
