The S&P Global Manufacturing Purchasing Managers’ Index (PMI) reported on Tuesday that the performance of Philippine-based factories moderated in December 2023 due to lower new orders and a drop in workforce numbers, but producers’ outlook was the highest since last August.

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

Philippine manufacturing PMI in the last month of 2023 was above Association of Southeast Asian Nations’ production index of 49.7.

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

“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.

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

Sales of Philippine factories last month focused on the domestic market as demand from the international market declined.

Factory 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.

Looking ahead, Philippine manufacturers remained optimistic for the next 12 months.

“Firms also remained hopeful that production will increase in the coming year. Indeed, confidence ticked up to its highest since August,” Baluch said. (PNA)