Philippine manufacturing activity accelerated sharply in August as stronger demand pushed factory output to its fastest growth pace in nearly a decade.

The Philippines Manufacturing Purchasing Managers’ Index rose to 54.9 from 51.8 in July, marking its fourth consecutive monthly increase, S&P Global Market Intelligence reported. A reading above 50 indicates expansion.

Output growth accelerated to its fastest pace since December 2016 as manufacturers benefited from stronger inflows of new work and a modest increase in export orders.

Maryam Baluch, an economist at S&P Global Market Intelligence, said the stronger August performance came after manufacturing activity remained broadly flat in the previous quarter amid disruptions linked to the Middle East conflict.

Manufacturers cited stronger underlying demand and improved production efficiency as key drivers of the increase in output.

The rise in new orders also prompted companies to increase purchases of production inputs. Input buying reached a six-month high, while manufacturers rebuilt their stocks of purchased materials for the first time since February.

Employment also improved, with factories adding workers for the first time in five months. Although modest, the increase marked the strongest pace of job creation in 21 months.

Cost pressures eased during the month. Input prices rose at a slower pace, despite higher expenses for energy, raw materials and logistics. Manufacturers continued to raise selling prices, but the increase remained modest.

Business confidence likewise strengthened, reaching its highest level since November 2024.

Manufacturers expecting higher output over the next year cited expansion plans, new product launches and expectations of stronger orders and customer demand.