Metro Manila (CNN Philippines, October 3) — The country’s manufacturing operations fared stronger in September, the latest survey by S&P Global Market Intelligence revealed.
The country’s S&P Global Market Manufacturing Purchasing Managers’ Index (PMI) stood at 52.9 during the month, improving from 51.2 in August.
“Growth across the Filipino manufacturing sector quickened in September, according to the latest PMI data. Firms noted that an increase in customer demand allowed production levels and factory orders to grow for the first time since June,” said S&P Global Market Intelligence economist Maryam Baluch in the report.
“Adding to the good news, inflationary pressures, which have been uncomfortably high in the past couple of months, moderated in the latest survey period, hinting that inflation may have peaked,” added Baluch.
After five straight months of acceleration, inflation slightly cooled to 6.3% in August. However, the Bangko Sentral ng Pilipinas expects September’s rate to settle at a range way above this rate at 6.6-7.7%.
Still, factory owners saw inflationary pressures ease during the month, said S&P Global.
“The rate of input price inflation eased to a 20-month low and charges levied increased at a softer rate than that seen in August. That said, the pace of charge inflation was still historically elevated with firms choosing to pass costs on to customers,” it added.
The American research firm reported that surveyed manufacturers observed “greater client appetite” last month. The continued weakening of foreign demand suggests domestic demand mainly drove growth, it added.
S&P Global likewise observed a further expansion in workforce numbers among factories, citing higher sales across the sector.
However, vendor performance deteriorated anew during the period, it said.
Surveyed manufacturers cited shipping delays and port congestion for the worse performance, noting that the extent at which average lead times grew longer was the greatest in six months this September.
“Though disturbances in supply-chains hindered production, an improvement in demand conditions helped keep expectations upbeat in September. Moreover, the 12-month outlook for output was strongly positive, and the degree of optimism highest since August 2018,” said S&P Global.
