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Local manufacturing growth strongest in Asean for third consecutive month 

The Philippine manufacturing sector grew the fastest anew in Southeast Asia last December, latest data showed, clocking in the country’s lead in the region for the third consecutive month.

Global research firm IHS Market released on Monday the overall Nikkei Purchasing Managers Index (PMI) of its covered countries in the region, putting the Philippines at the number one spot again among its counterparts in the Association of South East Asian Nations.

The Philippines’s PMI of 54.2, in particular, bested the performance of six other countries. It was followed by Vietnam’s 52.5, Myanmar’s 51.1 and Thailand’s 50.4.

This is the third consecutive month that the Philippines came on top of the Asean manufacturing sector performance. Those whose PMI fell below the 50-point threshold last December, meanwhile, were Malaysia at 49.9, Indonesia at 49.3 and coming in last was Singapore at 44.7.

The PMI is a composite index, calculated as a weighted average of five individual subcomponents. Readings above 50 signal an improvement in business conditions, while readings below 50 show deterioration.

The components include new orders—which weigh the most at 30 percent of the index; output—at 25 percent of the index; employment —at 20 percent; suppliers’ delivery times—15 percent; and stocks of purchases—comprising the other 10 percent.

The Philippines is also seen as a rare bright spot in the region in terms of manufacturing, as it is seen bucking the trend of a sluggish expansion in the beginning of 2018.

“Other survey indicators suggest that the Asean manufacturing sector is likely to have a disappointing start to 2018. Firms scaled down buying activity, and continued to cut back on their inventory levels,” IHS Market principal economist Bernard Aw said.

The principal economist’s outlook on the Asean manufacturing sector is a stark contrast to his outlook in the Philippine manufacturing sector, saying indicators in the country actually point out to a strong start for 2018.

“Business expectations about output in the year ahead strengthened to a four-month high, while firms increased labor capacity and purchasing activity further during December,” Aw said.

 

 

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