The index, compiled since 2016, reflects a composite measure of manufacturing health based on new orders, output, employment, suppliers’ delivery times, and stocks of purchases. A reading above 50 indicates improvement, while below 50 signals deterioration.
New orders fell for the third consecutive month and at the fastest pace in more than three years amid subdued customer demand and product life cycle changes. Export orders also declined for a second month, registering the steepest fall since September 2024. Production mirrored this trend, contracting for the third straight month. Several firms additionally cited disruptions caused by a typhoon in November, S&P Global said in a press release.
The decline in demand led to reduced purchasing activity, marking the first back-to-back fall in over four years and the steepest reduction since August 2021. This contributed to the fastest depletion of input inventories in just over five years. Finished goods stocks were also reduced at the quickest pace in almost a year.
Employment softened as manufacturers scaled back capacity to match lower workloads. Job shedding occurred for the first time since May, though only marginally, driven largely by layoffs and non-renewal of temporary contracts. Supplier delivery times improved slightly—the first improvement since April 2024—reflecting weaker demand pressures rather than supply chain efficiency gains.
Despite the subdued operational outlook, business confidence strengthened. Sentiment surrounding future output rose to its highest level since November 2024, supported by expectations of new customer acquisitions, upcoming projects, economic recovery, and intensified marketing. Many firms anticipate a rebound in demand over the coming year.
Inflationary pressures remained contained. Slower demand led to the weakest rise in input costs in four months, with price increases remaining well below historical averages. Selling prices rose slightly after a decline in October, though the pace of inflation was modest, added the release.
“Manufacturing conditions in the Philippines deteriorated sharply in November. 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 Trevor Balchin, economics director at S&P Global Market Intelligence.
“There were signs of promise, however, as manufacturers expressed increased optimism for the next 12 months, anticipating growth due to new projects and improved economic conditions. Input price inflation eased to a four-month low, remaining well below the long-term trend, while output prices rose slightly,” added Balchin. “Overall, while the manufacturing sector faces immediate challenges, the outlook suggests cautious optimism for growth moving forward.”
ALCHEMPro News Desk (SG)
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