The Philippine manufacturing sector witnessed its strongest growth in over seven years, driven by strong domestic demand, product diversification, and new client acquisitions.
The Philippine manufacturing sector finished 2024 on a strong note, recording its most significant growth in over seven years, according to S&P Global's report on Thursday. The purchasing managers' index ( PMI ) for the sector increased for the 16th consecutive month to 54.3, up from November's 53.8 and the highest level since November 2017's 54.8. It also matched the reading in April 2022. PMI readings above 50.0 indicate growth, while those below signal a contraction.
'The two primary components of the PMI calculation (the Output Index and New Orders Index) positively impacted the headline figure in December,' S&P Global stated. Output and new orders expanded at the fastest pace in 32 months, fueled by robust domestic demand, product diversification, and new client acquisitions. International demand also rebounded, with new export orders increasing for the first time in five months. In response to the surge in demand, manufacturers' purchasing activity grew at the sharpest rate in nearly two years, supporting inventory growth after two months of contraction. However, employment experienced a slight decline, ending a three-month period of job creation. This was attributed to improved production efficiency, enabling firms to fulfill rising orders without expanding their workforce. 'While production efficiency enabled manufacturers to handle current tasks, it also resulted in a slight decrease in employment, thus ending a three-month streak of job creation,' noted S&P Global economist Maryam Baluch. 'However, this could be a temporary setback, especially if demand remains resilient as anticipated throughout 2025,' she added. Despite some supply chain challenges, such as vendor delays caused by increased purchasing activity and logistical issues, S&P Global reported that manufacturers also expressed confidence in expanding output in 2025. 'Firms remained optimistic that output would increase over the coming year, driven by expectations that demand trends will strengthen further and plans to launch new products,' it stated
MANUFACTURING GROWTH PHILIPPINES DOMESTIC DEMAND PMI
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