The country’s manufacturing sector suffered its steepest decline in more than four years in November, signaling mounting pressure on an economy still struggling to regain momentum amid weakening domestic and global demand.

Latest data from S&P Global show the Philippines’ Purchasing Managers’ Index (PMI) dropped to 47.4 in November from 50.1 in October. A PMI reading below 50 indicates deterioration in factory operating conditions. This month’s figure is the lowest since August 2021, when the sector was reeling from pandemic restrictions.

Sharp Decline in Output and New Orders

S&P Global reported a “drastic decline” in both production and new orders — two critical components that drive manufacturing performance.

New orders contracted for the third consecutive month, falling at their fastest pace since August 2021. Export demand also weakened, reflecting a softer global market as major economies, including China and the US, scale back imports.

The contraction extended to purchasing activity and employment, with factories cutting back on inputs and slowing down hiring. Some firms said clients reduced orders due to higher inventory levels, sluggish retail spending, and tighter financial conditions.

Sector Under Strain

The slump comes as the broader industrial sector has been showing signs of stress this year.

Industry leaders have previously flagged rising logistics costs, supply chain disruptions, and shifting consumer behavior as key challenges.

Economists noted that sustained contraction over several months could impact employment and wage growth, particularly in manufacturing hubs outside Metro Manila.

Optimism Despite the Downturn

Despite the grim numbers, manufacturers expressed greater optimism for the next 12 months. Many firms said they anticipate new projects, improved raw material supplies, and policy support from government economic managers. Some are banking on a rebound in consumer spending during the Christmas season and early 2026.

Still, analysts warn that recovery will depend heavily on external markets and the government’s ability to stimulate local demand.

What This Means Moving Forward

The continued slowdown in manufacturing could temper the Philippines’ GDP growth prospects, as the sector accounts for a significant portion of the country’s industrial output. Policymakers may need to recalibrate measures to support factories, especially small and medium-sized enterprises that remain vulnerable to market shocks.

The Daily Sun Chronicle will continue to track key economic indicators and their impact on workers, industries, and local economies in Mindanao and across the country.

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