Production among local factories moderated in December 2023 due to low orders and a drop in their workforce, but the producers' outlook was the highest since last August, the S&P Global Manufacturing Purchasing Managers' Index showed.

Manufacturing PMI in the last month of 2023 was above the Association of Southeast Asian Nations' production index of 49.7.

The country's manufacturing index in December 2023 stood at 51.5, easing from a score of 52.7 in November last year.

Indices above 50 show improvement in manufacturing condition, while below the neutral score mean less production.

"The year concluded with yet another expansion across the Filipino manufacturing sector. Output and new orders continued to rise, albeit at softer rates," S&P Global Market Intelligence economist Maryam Baluch said.

Orders slow down

The report noted that growth in orders slowed down across sectors.

Factory sales last month focused on the domestic market as demand from the international market declined.

Output expanded at a weaker rate in December 2023, which is the slowest in three months.

"However, the main concern in the sector remains the further curtailment of workforce numbers. Evidence of spare capacity and a cool down in new order growth prompted redundancies," Baluch added.

The manufacturing PMI report noted that employment in factories fell for two consecutive months in December 2023 and at a faster pace.

On the prices front, there was an uptick in input and output charges mainly due to higher prices of fuel, materials, and shipping fees. This prompted producers to sell their finished products at a higher cost.