THE Philippine manufacturing output fell into a contraction in October, as the economic fallout from the COVID-19 persisted to cause business closures and drag client demand.
Results of the monthly survey conducted by IHS Markit showed that the Philippines Purchasing Managers’ Index (PMI) fell to 48.5 in October, below the 50.0 neutral mark that separates expansion from contraction.
The latest reading compares with the seven-month high 50.1 recorded in September, and 52.1 in October 2019.
“Weak client demand in domestic markets, a sharp contraction in employment, and lower production weighed on the health of the sector, causing the overall PMI figure to drop,” said Shreeya Patel, economist at IHS Markit.
IHS Markit reported a drop in new orders during the month, amid ongoing business closures and weakening client demand. Job losses also extended into the fourth quarter, along with the drop in purchasing activity.
Latest data from the Philippine Statistics Authority showed an unemployment rate of 10 percent in July, equivalent to 4.6 million jobless Filipinos.
Moving forward, Patel said that the reopening of businesses could support growth, but this could not be as fast as the ideal rate should the pandemic persists.
“Until virus cases are tamed domestically and globally, we are likely to see a protracted recovery in manufacturing production,” she said.
“For now, firms remain optimistic that production will improve over the coming year, however, it remains to be seen whether the latest contraction was temporary,” she added.(GMA News)
