METRO MANILA– Local manufacturing output steadied in February, a recent survey by IHS Markit revealed.
The IHS Markit Philippines Manufacturing Purchasing Managers’ Index (PMI) remained at 52.5 during the month, with the American-British information provider noting the latest figure signals a “solid uptick in operating conditions.”
The value, also posted in January as a 25-month high, is well above the 50.0 neutral value between expansion and contraction.
“Output and new order volumes rose moderately, with firms mentioning the resumption of business at client firms following easing restrictions,” read the report on the survey.
With the observed growth in production, manufacturers likewise raised purchasing activity modestly halfway through the first quarter of 2021, IHS Markit said.
Firms’ stocks of purchases posted their sharpest growth rate in more than four years, it noted, while stocks of finished goods recorded but a marginal increase.
However, employment in the sector declined for the twelfth month, observed IHS Markit, with survey participants citing sufficient worker capacity and voluntary resignations for staff cuts. However, the rate at which jobs were shed eased to the mildest during the said period of decline.
The pandemic has forced companies to trim workforces in a bid to further cut costs amid the economic downturn it induced.
Respondents also flagged pressure on supply chains due to transport restrictions, with port congestions often mentioned by them.
Input price inflation likewise rose its sharpest since October 2018 with shortages in raw materials driving the increase, IHS Markit said. Firms eyed passing the resulting larger costs with higher selling charges, it added.
“Looking ahead, expectations regarding output in the year ahead remained positive overall. The degree of optimism improved from that seen in January, with firms often mentioning hopes of a return to normality,” said IHS Markit.
This suggests concerns regarding output shall remain over the next 12 months, it also said.
In a market report, Rizal Commercial Banking Corporation chief economist Michael Ricafort noted that measures to further re-open the economy through higher maximum operational capacities for industries may lead to manufacturing bouncing back quicker.
The deployment of coronavirus disease 2019 vaccines nationwide, which formally began Monday, shall also help boost confidence in the economy and recovery of many businesses particularly manufacturing, Ricafort added.(CNN)
