Easing of restrictions drives manufacturing to seven-month high in September —IHS Markit

The Philippine manufacturing sector posted a seven-month high in September, following the easing of quarantine restrictions in more parts of the country during the month.

According to the results of the monthly survey conducted by IHS Markit, the Philippines Purchasing Managers' Index (PMI) grew to 50.1 in September from 47.3 in August.

The PMI is a composite indicator of the manufacturing sector’s performance, with 50.0 as the threshold. A reading above 50 indicates growth, while below 50 is a contraction.

The latest reading is the highest in seven months, since the PMI was recorded at 52.3 in February.

September data indicated that new orders also rose for the first time in seven months, led by improving customer demand as more parts of the economy reopened.

Trade Secretary Ramon Lopez welcomed the development.

“Ibig sabihin lang po ay nakikita natin ‘yung unti-unting recovery ng ating economy,” he said at the Laging Handa briefing on Thursday.

Metro Manila, along with several key areas, was placed under general community quarantine for the full month of September. This has been extended until the end of October.

"The latest Philippines manufacturing data showed that operating conditions stabilised at the end of the third quarter," Shreeya Patel, economist at IHS Markit, said in a commentary.

"New business expanded for the first time since February, albeit tentatively, while production levels dropped only slightly," she added.

Patel noted, however, that despite the easing of restrictions, the ongoing quarantines continue to limit operations.

"According to firms, the ongoing restrictions related to the COVID-19 pandemic continued to limit the performance of the sector, with some businesses forced to pare back operations," she said.

"On a more hopeful note, stronger business sentiment and efforts to rebuild stocks suggest panellists are preparing for an improvement in demand over the coming months, although optimism continues to rest on the development of the pandemic," she added.

The Philippine Statistics Authority (PSA) is scheduled to release official figures of the Monthly Integrated Survey of Selected Industries (MISSI) for the month of September on November 5, 2020.—AOL, GMA News