Stronger improvement in operating conditions in the Philippine manufacturing sector lifted production in November 2024, according to S&P Global.
The latest PMI data from S&P Global showed production levels expanded at a faster pace as demand continued to strengthen, with companies also gearing up for anticipated sales growth in the coming months.
The S&P Global Philippines Manufacturing PMI — a composite single-figure indicator of manufacturing performance — rose from 52.9 in October to 53.8 in November, marking the 15th consecutive monthly improvement in the health of the Filipino manufacturing sector, and one which was the most marked since mid-2022.
A reading above 50 indicates an expansion of the manufacturing sector compared to the previous month.
Employment, input buying and post-production holdings also saw increases, the latter rising for the first time in four months, reflecting a proactive approach to meeting higher production needs, it said.
S&P Global said optimism for the year ahead reached a 22-month high.
“November saw the Filipino manufacturing sector ramping up production in anticipation of greater sales in the coming months. Hiring, purchasing activity and postproduction inventories were also raised in preparation. New sales recorded further growth, as demand conditions continued to improve,” said Maryam Baluch, economist at S&P Global Market Intelligence.
“However, some supply-side challenges acted as headwinds, as adverse weather conditions resulting from the recent typhoons hitting the country and rising inflationary pressures make a difficult environment for manufacturers. Nonetheless, firms remained optimistic about future output, with hopes that improved demand trends and the upcoming election year will provide a boost to the sector,” said Baluch.
Typhoons which made landfall over the past month and their impact led to longer lead times for inputs. The incidence of delays was the most marked since October 2021.
The latest data also indicated a further escalation in inflationary pressures, with input costs and output charges climbing at their fastest rates in 21 months, respectively, it said.
Manufacturers eagerly anticipated a sales boost in the months ahead, prompting a notable ramp-up in production during the latest survey period, with growth accelerating from October.
A portion of the production was directed towards supporting the growth of current new sales. Demand conditions improved for the 15th straight month. While the pace of increase moderated to a three-month low, it remained solid and historically strong, the report said.
Companies attributed the uptick in output to inventory building. Stocks of finished goods rose for the first time in four months, with the rate of accumulation the joint-fastest in two years (alongside April 2024).
Companies expanded their capacity further as job creation was recorded for a third straight month. The pace of increase was just shy of October’s recent peak.
Purchasing activity surged as well, with the rate of expansion accelerating over the month. However, this increase in input buying did not translate into a rise in pre-production inventories, as companies often utilized inputs directly for production.
Manufacturers expressed strong optimism regarding future output in November. Sentiment reached its highest level since early-2023, as firms were hopeful that improving demand conditions and the upcoming election year would support further expansions.
