Manufacturing operations in the Philippines grew stronger in November 2023 on the back of sustained expansion in output and new orders and the slowing inflation, S&P Global Market Intelligence said over the weekend.
A report published on Philexport News and Features showed that the headline S&P Global Philippines Manufacturing PMI–a composite single-figure indicator of manufacturing performance—went up to 52.7 in November from 52.4 in October. This was the strongest improvement in operating conditions since February this year.
S&P said the increase reflected gains last month as rates of growth for new orders quickened to an eight-month high, while output growth was at its strongest in 10 months. Companies noted that strong demand both in domestic and foreign markets, new clients, and increased contract work boosted overall sales and production.
Purchasing activity, however, decreased for the first time in 15 months. Higher prices for raw materials and concerns of overstocking dissuaded input buying at some firms. Still, some businesses continued to purchase inputs amid growing input requirements, helping to offset the overall downturn.
Stocks of purchases expanded for the second month running, although the rate of increase was modest and weaker than in October.
The growth in inventories partly stemmed from manufacturing firms holding onto inputs in an effort to become more cost-effective.
The November data also pointed to a modest reduction in manufacturing employment following two months of tepid growth. The drop came amid continued spare capacity, as backlogs dropped for the fifth month running and sharply leading some firms to curtail staffing. Julito G. Rada
Meanwhile, vendor performance worsened in November following two months of improvements. The rate at which lead times lengthened was moderate overall, with firms citing material shortages and congestion at ports.
This translated into some reports of higher material and supplier costs which were largely blamed for the latest rise in cost burdens.
The rate of input price inflation was the weakest recorded in over three years, resulting in a similarly modest uptick in manufacturers’ selling prices, according to the report.
It said Filipino goods producers remained optimistic, with just under half of respondents (46 percent) predicting an expansion in output in the coming 12 months.