Manufacturing PMI dips as output growth slows

THE country's manufacturing sector started 2025 with strong demand growth although output expansion moderated from the highs recorded in December, S&P Global said in its latest Philippines Manufacturing PMI report.

The purchasing managers' index (PMI) stood at 52.3 in January, down from December's 32-month high of 54.3. The latest reading was a five-month low, but remained above the 50.0 threshold separating an expansion from a contraction.

«In January, demand for Filipino goods continued to improve, although the pace of expansion in new business experienced a slight slowdown from the recent high recorded in December,» S&P Global said.

«Nevertheless, the rate of expansion in intakes of new orders remained historically robust, as firms reported that strong client demand and the acquisition of new customers drove increased sales,» it added.

Manufacturing output grew for a 10th straight month though at a slower rate that was the second-weakest in nearly a year.

S&P Global said that manufacturers increased purchasing activity as they anticipated stronger sales ahead. Both raw material and finished goods inventories rose at historically strong rates, rebounding from December's sharp stock decline.

However, supply chain challenges persisted, with delivery delays due to truck shortages and port congestion. Still, the decline in vendor performance was the least pronounced in five months, suggesting some improvement in supply conditions.

On the pricing front, input costs rose at their weakest pace in five months, helped by easing cost pressures for some raw materials. However, transportation costs remained a concern, contributing to higher overall expenses.

Despite this, manufacturers opted to pass on these costs to customers, leading to a slight acceleration in output price inflation compared to December.

«If demand trends continue to improve as they have done, then employment growth could be on the cards in the months ahead,» S&P Global economist Maryam Baluch noted.

Employment levels remained unchanged for a second straight month… Some firms hired additional workers in response to higher sales, but resignations offset these gains, resulting in no overall