MANILA, Philippines – The Philippine manufacturing sector sustained growth in October albeit at a slower pace, according to the latest reading of the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI).

The PMI for the Philippines registered a reading of 56.5 in October, signaling expansion in the manufacturing sector despite rising input costs brought about by the depreciation of the peso against the dollar.

While the rate of growth during the reference period was slower than the record high 57.5 in September, this was still higher than the average reading since January.

An index reading of above 50 indicates improvement in business conditions and activity while a reading below 50 indicates the opposite. The Nikkei manufacturing PMI is released monthly ahead of official economic data.

IHS Markit, the firm that collected data for the PMI, attributed the continued improvements in manufacturing conditions in the Philippines to sustained growth in total output and new orders.

Purchasing managers surveyed during the reference period reported hiring additional workers during the reference period to meet increased production volumes.

High purchasing of inputs to increase pre-production inventory was also reported in October.

“A further increase in purchasing activity and employment alongside continued stock building contributed to the overall improvement in operating conditions. Meanwhile, strong new business inflows allowed firms to continue to raise output prices as input costs rose for the tenth successive month,” said the report.

To cope with higher orders, manufacturers required their workers to render overtime hours to reduce the level of order backlogs.

Manufacturers also implemented another round of price hikes during the month to preserve their profit margins amid rising costs of inputs resulting from the depreciation of the peso.

“The Philippines remained on a strong path of expansion in manufacturing activity as solid domestic demand drove new orders and production higher. Robust export sales also contributed to the improvement in overall operating conditions,” said IHS Markit economist Bernard Aw in a commentary.

Source: www.philstar.com