The PMI is a composite indicator of the performance of the manufacturing sector, with 50.0 as the threshold.
The performance of the manufacturing sector registered a slight decline in August as production during the period fell from a month earlier.
On Monday, the results of the monthly IHS Markit Survey showed the seasonally adjusted Purchasing Managers’ Index (PMI) dipped to 51.9 for the period from 52.1 posted in July. Still, this remained one of the highest readings recorded this year.
The PMI is a composite indicator of the performance of the manufacturing sector, with 50.0 as the threshold. A reading above 50 indicates growth while below 50 shows a contraction.
“Latest PMI figures showed that growth in the Philippines manufacturing sector was largely similar in both July and August,” IHS Markit economist David Owen said.
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“While sales growth was down from the previous month, greater hiring activity meant that the headline reading dropped only slightly,” he added.
Owen said that some companies noted a slowdown in customer demand due to monsoons during the period, leading to a slight decline in supply chain efficiency.
“Nevertheless, firms were still able to increase stock levels,” he said.
Owen noted that the country must watch out for the continuous drop in overseas production.
“New orders from abroad have now fallen in 10 out of the last 12 months, as trading conditions in the region remain difficult due to the US-China trade war. The economy is subsequently relying on strong domestic sales to stop growth from falling any further,” he said.
