THE PHILIPPINE manufacturing sector led peers in the Association of Southeast Asian Nations (ASEAN) in terms of improved business conditions for the second straight month in November, according to a survey conducted by IHS Markit for Nikkei, Inc.
The Nikkei ASEAN Manufacturing Purchasing Managers’ Index (PMI) showed that, at 54.8, the Philippines’ PMI bested the six other ASEAN economies covered and the region’s own 50.8 reading that represented a “marginal” improvement from October’s 50.4, even if that was its best performance since April.
Only Singapore bared a deterioration in November at 47.4 (from October’s 51.3) — below the 50.0 mark that separates readings above that point that denote improvement from the preceding month from those below it that reflect worse conditions.
The Nikkei Philippines Manufacturing PMI, released to journalists on Friday last week, showed the country’s reading at its highest in 11 months in November, lifted by expansion in output, new orders and employment.
The headline PMI is a composite indicator derived from responses to survey questions on new orders (with a 30% weight), output (25%), employment (20%), suppliers’ delivery times (15%) and inventories of inputs (10%) in order to provide a broad picture of the health of the manufacturing sector in a given month.
“The ASEAN (Association of Southeast Asian Nations) manufacturing economy looks set to finish the final quarter of 2017 with one of its strongest quarterly performances for over three years,” the regional report quoted Bernard Aw, IHS Markit principal economist, as saying.
“The survey’s sub-indices also showed signs that the upturn will gain momentum in December.”
At the same time, he warned of rising inflationary pressures across the region.
Data from the Philippine Statistics Authority, which will report November inflation data today, show overall price increases picking up since August, though some analysts expect last month to have seen a slight slowdown.
“Rising global prices for raw materials may have benefitted commodity-producing countries within ASEAN, but it also meant that firms faced higher input prices,” Mr. Aw said.
“In many cases, companies were unable to fully pass on the rise in costs to their clients through higher selling prices, suggesting an ongoing squeeze on profit margins,” he added.
“With… ASEAN manufacturing… showing no sign of capacity strains, tighter margins could weigh on staff hiring in the coming months.” — E. J. C. Tubayan