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Manufacturing still contracted in November but has improved compared to the previous month as export demand began to rebound from a slump, London-based IHS Markit Ltd. said on Tuesday.
The latest IHS Markit Purchasing Managers Index showed PMI rose to 49.9 last month from 48.5 in October, though still below the neutral mark of 50, marking a year-on-year drop.
In a report, he said there was “near stability” in manufacturing conditions in the Philippines, as production levels increased fractionally for the first time since June, job losses slowed at the slowest pace in nine months, and job backlog it was “substantially” reduced at the end of November.
In a statement, IHS Markit economist Shreeya Patel attributed November’s better manufacturing performance in part to a “notable” improvement in external demand.
“Businesses saw only a fractional contraction in the number of new orders placed, as new orders from foreign markets increased moderately, helped by relaxed border restrictions,” said IHS Markit.
The state planning agency, the National Economic and Development Authority (Neda) previously noted an increase in exports to China last September, which it attributed to the “relatively accelerated return to full production after mobility restrictions due to the pandemic. “.
“The Philippine Trade and Investment Center in Shanghai expects China to remain one of the Philippines’ top export markets and investment sources due to the great interest and huge potential of China-led trade and investment in the country. These efforts are strongly aligned with the China Belt and Road Initiative, which aims to forge long-term bilateral ties between the two countries, ”Neda said in a recent report.
Despite these green shoots, Patel said that the recovery in domestic manufacturing “may not be smooth as the health of the sector is based on the number of COVID-19 cases and the impact the virus has on the global economy.” .
The Philippines currently has the second highest number of coronavirus infections in Southeast Asia.
“While vaccine developments look promising, it is not yet clear when the restrictions will end completely,” Patel said. INQ
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