MANILA, Philippines – The Philippine manufacturing sector grew at a record pace in September, outpacing the performance of other countries in Southeast Asia, according to the latest reading of the Nikkei Philippines Manufacturing Purchasing Manager’s Index (PMI).
The PMI registered a higher reading of 57.5 in September, higher than the August reading of 55.3 and is the steepest since data collection for the local manufacturing sector began in 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.
The positive reading in September was attributed to strong client demand and higher production targets. “Driving the overall improvement in business conditions was another marked rise in new contract win as a number of firms reported having secured new customers. Moreover, the rate of growth was the sharpest on record so far,” said IHS Markit the entity that compiles the data for Nikkei.
Purchasing managers surveyed during the reference period reported hiring more workers to enhance operating capacity and accommodate additional orders.
Greater demand for goods also led manufacturers to purchase more input materials despite the higher cost brought about by the depreciation of the peso against the US dollar.
Business ( Article MRec ), pagematch: 1, sectionmatch: 1
“All looks positive for goods-producing companies in the Philippines, with strong demand conditions leading to robust growth of new orders and output,” IHS Markit economist Alex Gill said in summary. “With sound fundamentals, the sector looks set to continue to grow in coming months.”
The September performance of the local manufacturing sector outpaced those of other countries in Southeast Asia. Vietnam registered a PMI reading of 52.9; Indonesia, 50.9; Thailand, 48.8; Singapore, 48.6; Malaysia, 48.6; and Myanmar, 48.1.
Growth was seen in the Philippines, Vietnam and Indonesia while contractions were seen in Thailand, Singapore, Malaysia and Myanmar.
The PMI registered a reading of 50.5 in September, up from 50.3 in August.
“The overall improvement in operating conditions in the ASEAN manufacturing sector continued to be driven by strong growth rates in the Philippines and Vietnam, and to a lesser extent Indonesia, while the other four monitored nations each reported a decline,” said Gill.
“Although this divergence leaves the headline growth figure vulnerable, further marked increases in new orders and employment in the Philippines and Vietnam, mean both sectors look well-placed for sustained expansion in coming months, thereby helping to support the ASEAN PMI.”
