The manufacturing industry’s purchasing managers index rose to 53.5 percent in January from 53.1 percent in December 2022, according to the latest report from S&P Global Market Intelligence.
A PMI is a gauge of a country’s manufacturing activity. A reading above 50 indicates growth or expansion of the sector compared to the previous month, while a reading under 50 suggests contraction.
Rizal Commercial Banking Corp.’s market analytics unit Hexagon Perspective said the positive PMI was partly supported by the near record high remittances, increased revenues from the business process management sector, higher exports and imports, improving local unemployment, continued increase in infrastructure spending and foreign direct investments reverting to pre-pandemic levels.
It said the sustained improvement in PMI is a good signal of economic growth, after the seasonal increase in economic activities during the holiday season.
“The latest local manufacturing PMI gauge generally improved in recent months amid measures to further reopen the economy towards greater normalcy. Further improvement of foreign and local tourism in recent months and the resumption of the nationwide face-to-face/in person schooling supported the recovery of many affected businesses/industries, including some manufacturers,” said RCBC chief economist Michael Ricafort.
The continued recovery of foreign and local tourism as restrictions eased, especially since February to March 2022, also supported the recovery of related or allied businesses/industries, including some manufacturers.
Restrictions on foreign tourism eased, with more than 2.65 million foreign visitors arriving in the country and international tourism revenues reaching $3.68 billion in 2022.
Group tours from China resumed since the latter part of January 2023, providing another source of growth for foreign tourism and for the overall economy.
Ricafort said face-to-face/in-person schooling also resumed and were on the right track to bringing along allied businesses and industries, including some manufacturers, towards greater recovery path.
Near record high exports and imports data on a monthly basis in recent months also supported the increased manufacturing activities, he said.