Phl manufacturing suffers sharpest drop since 2021

The Philippine manufacturing sector contracted sharply in November, posting its steepest decline since August 2021, according to Standard & Poor’s (S&P) Global.

S&P Global’s Manufacturing Purchasing Managers’ Index (PMI) — a composite gauge of business conditions across new orders, output, employment, suppliers’ delivery times, and inventories — fell to 47.4 in November from 50.1 in October. Any reading below 50 indicates a contraction in the sector.

Drop in new orders and production

In its report released Monday, 1 December, S&P Global attributed the downturn to simultaneous declines across all major PMI components, driven mainly by a steep drop in new orders and production.

“Output and new orders contracted at their fastest rates since August 2021, driven by weak customer demand.”

“Exports, purchasing and employment also declined, reflecting broader challenges in the sector,” said S&P Global Market Intelligence Economics director Trevor Balchin.

The report said new orders and production both fell for the third consecutive month, with the latest contraction marking the sharpest decline since August 2021.

Weaker demand, product life cycle changes, and reduced customer requirements contributed to the decline. Many firms also reported business disruptions due to typhoons “Tino” and “Uwan.”

New export orders and purchasing activity likewise decreased for the second straight month.

The sector also saw job losses for the first time since May, with businesses citing non-renewal of contracts and downsizing tied to lower output requirements.

Despite the downturn, S&P Global said manufacturers remain optimistic, with business sentiment rising to its strongest level since November 2024.