TRADE SECRETARY Ramon M. Lopez remains confident in the economic recovery despite weaker Philippine manufacturing in October, calling the decline a “pause” in momentum.

The manufacturing Purchasing Managers’ Index (PMI) fell to 48.5 last month from 50.1 in September, the seventh time the index fell below the 50-point level marking the line between expansion and contraction.

IHS Markit said operating conditions in the sector worsened as new orders declined, businesses closed, and consumer demand weakened while the pandemic persisted.

Mr. Lopez in a statement Wednesday said staffing at companies is still reduced even though fewer businesses closed. Restrictions on movement and large gatherings are still in force.

“But we have started the reopening of the economy and shall continue to do so gradually and safely,” he said.

He said that the government is working on ensuring strict implementation of health standards in workplaces to improve consumer confidence. The government has also introduced tax breaks to encourage the production of goods needed to address the health crisis, such as medical supplies and personal protective equipment.

“We are confident that the economy is generally on the path to recovery, although overall demand will still be subdued as compared to pre-pandemic levels, as some jobs are just starting to be recovered,” Mr. Lopez said.

The PMI presents the weighted average of five indices: new orders, output, employment, supplier delivery times, and purchase stocks. As a measure of expected orders by purchasing managers, it is considered a leading indicator for manufacturing activity as raw materials ordered are transformed into processed goods.

IHS Markit said Philippine production volumes and new orders fell due to weak demand. Manufacturing companies also continue to cut staff.

Supplier shortages due to uncertain demand depleted stocks of raw material and finished goods, while delivery times were delayed because of transport restrictions.

Manufacturers, IHS Markit said, expect production to increase next year, although they anticipate that the pandemic will have a long-term impact on production.

Among selected members of the Association of Southeast Asian Nations, the Philippine index was below those of Thailand and Vietnam, and was tied with Malaysia. — Jenina P. Ibañez