POSITIVE START. Workers repack canned sardines at a manufacturing plant in Sto. Tomas, Batangas on March 1, 2023. S&P Global Manufacturing Purchasing Managers' Index reported on Thursday (Feb. 1, 2024) that Philippine factories were off to a good start in 2024. (PNA file photo by Joey Razon)
MANILA – The local manufacturing sector kicked off the year on a positive note, the S&P Global Manufacturing Purchasing Managers’ Index (PMI) reported Thursday.
The Philippines’ manufacturing PMI has remained above the neutral score of 50 at 50.9 in January this year, easing from a 51.5 index in December 2023.
“The turn of the year revealed a slight weakness in demand conditions, as new orders and output growth eased,” S&P Global Market Intelligence economist Maryam Baluch said.
S&P Global’s survey noted that there was a cooling demand in the overseas market, with factory orders recording a five-month low.
Due to softer demand conditions, production levels were at a historically subdued rate, it added.
However, an optimistic outlook was observed among manufacturers as firms bought additional inputs in anticipation of stronger sales in the coming months. Buying activity rose at its fastest pace for the past six months.
On employment, hiring levels were flat after two consecutive months of job shedding.
According to S&P Global, some firms recorded cutting headcount and there were also resignations in January but these were offset by companies that were hiring as they expected growth in new orders.
Inflationary pressures among producers last month were historically muted, with growth recording the lowest since the survey began in January 2016.
“Moreover, looking forward, global headwinds and sluggish demand from external markets, especially China, are likely to weigh on the Filipino manufacturing sector,” Baluch said.
"On the flipside, other evidence from the latest PMI data, such as the rise in buying activity and the building of stocks, indicates that manufacturers anticipate continued growth in the coming months. Additionally, historically subdued inflationary pressures will also assist the sector, as firms seek to price competitively,” she added.
The PMI reflects the condition of the local manufacturing sector, measuring new orders, inventory levels, production supplier deliveries, and employment activities.
The neutral score is 50. Readings above 50 reflect the improvement of the sector and below the neutral score translate to deterioration. (PNA)
