As goods producers in the Philippines saw fresh contractions in output and new orders in September this year, the S&P Global Philippines manufacturing Purchasing Managers’ Index (PMI) dropped into sub-50 territory for only the third time in over four years in the month.
Sales decreased for the first time since March amid reports of lower customer numbers. Despite this, manufacturers continued to increase their purchasing activity and add to input stocks, although finished goods inventories dropped as firms worked on backlogs. Cost burdens eased in the month since August, but the pace of increase was among the highest recorded in the year till now, and compared with a muted rise in factory gate prices.
The headline S&P Global Philippines manufacturing PMI fell from 50.8 in August to 49.9 in September. While signalling just a fractional deterioration in the health of the manufacturing sector, this was only the third time in just over four years where the headline index has been in contraction territory. Weaker operating conditions were mainly attributed to a renewed (albeit marginal) drop in new order intakes in September.
However, order books with foreign clients continued to improve, signalling that the downturn was mainly centred on the domestic market, S&P Global Ratings said in a release. Reduced sales volumes led manufacturers in the country to scale back production at the end of the third quarter, which ended a three-month sequence of expansion.
News Courtesy: Fibre2fashion