By Justine Irish D. Tabile, Senior Reporter
Philippine factory activity contracted for a second straight month in October as weak demand weighed on output and new orders, S&P Global said.
The S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) stood at 49.1 in October, down from 49.6 in September, indicating a further deterioration in operating conditions.
This was the weakest reading in six months or since the 48.3 in April.
A PMI reading below 50 signals a deterioration in operating conditions from the previous month, while a reading above 50 signals an improvement.
“Although declines in output and new orders remained modest, the sharper fall in purchasing activity and further job losses suggest manufacturers remain cautious amid subdued demand,” S&P Global Market Intelligence Principal Economist Siân Jones said.
S&P Global said output declined at a slower pace in October, while the contraction in new orders deepened. Some firms cited weak demand and hot weather, which they linked to the current El Niño.
Weak demand also extended to overseas customers, with new export orders remaining in contraction, although the decline eased, it said.
Manufacturers cut purchasing activity at the fastest pace in 11 months as production requirements fell. Employment also declined for a second straight month, with some firms attributing the reduction to resignations.
S&P Global said price pressures eased in October, with input costs rising at the slowest pace in eight months.
Meanwhile, business confidence rebounded to a near two-year high amid expectations that improved demand, new projects and additional customers would support output growth over the next year.