Philippine factory production continues contraction in November -IHS Markit

The Philippine manufacturing output continued to contract in November, albeit closer to stabilization as levels rose for the first time since June, results of the monthly survey conducted by IHS Markit released on Tuesday showed.

The Philippines Purchasing Managers' Index (PMI) rose to 49.9 in November from 48.5 in October. 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.

IHS said the latest figures came with the fractional increase in production volumes midway through the final quarter of 2020, with firms attributing this to the reopening of businesses and a softer reduction in new orders.

"The Filipino manufacturing sector showed promising signs of renewed recovery momentum in November as the headline PMI figure neared stabilisation. Production rose for the first time since June as foreign demand improved notably from that seen in October," said Shreeya Patel, economist at IHS Markit, said in a commentary.

"Encouragingly, firms registered the slowest drop in employment in the current nine-month sequence of decline despite a steep depletion in backlogs of work," she added.

IHS likewise noted that sentiment regarding production in the coming year remained in positive territory, driven by hopes of improved demand and the passing of the coronavirus disease 2019 (COVID-19).

"Nevertheless, the path to recovery may not be smooth. The health of the sector rests on the number of COVID-19 cases and the impact the virus has on the global economy. Whilst vaccine developments look promising, it is still unclear when restrictions will come to a complete end," said Patel.—AOL, GMA News