Philippine manufacturing PMI hits ten-month high to 54 in October

The sector’s growth is driven by increase in client demand.

Operating conditions in the Philippine manufacturing sector continued to improve after the September reading of the Purchasing Managers Index rose to 54.0 in September from 52.0 in April, according to Nikkei Philippines.

The Nikkei Philippines PMI is a leading gauge to measure health in the manufacturing sector. PMI readings above 50 represent expansion.

The monthly PMI figures also indicates stronger growth as fourth quarter starts. Manufacturing firms also responded in a survey saying that they saw client demand rise in October, having them increase their purchase activity. Employment levels also rose for the third straight month.

Total new orders also booked its fastest growth rate in five months, pushing firms to raise their output.

Against this positive performance, Economist at IHS Markit David Owen said that Filipino firms continue to be optimistic about their business outlook in 2019.

However, some businesses are also seeing increased output charges.

“[I]nflationary pressures led to the sharpest uptick in selling prices seen since the survey began in 2016. Businesses continued to feel the burden of higher raw material costs, the TRAIN laws and a weakening Peso. The recent trend suggests that price pressures are unlikely to relent in the coming months,” Owen added.