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Published: Tue, October 03, 2017
Economy | By Melissa Porter

Weak sterling hits manufacturing PMI

Weak sterling hits manufacturing PMI

The growth of new export business remained among the best registered over the past six-and-a-half years.

The Philippines last month managed to land second place in Southeast Asia behind Vietnam in terms of growth of manufacturing activity, but the improvement was its second weakest since its inclusion in January a year ago in the survey IHS Markit conducts for Nikkei, Inc.

New orders, output and employment all rose at sharper rates in September.

Positive outlook Confidence in United Kingdom manufacturing is also high, with over 51 percent of manufacturing companies surveyed expecting further growth in production over the next 12 months. Sales have increased to Europe, China, the USA and South America. "Surging order-book growth has encouraged manufacturers to take on extra staff at a rate never previously seen in the 20-year history of the PMI survey".

Latest price data showed another round of input cost rises in September. However, manufacturers faced higher commodity prices and supply chain pressures and were having to contend with the lower value of sterling since the Brexit vote.

"The continued optimism reported in industry surveys will be positive news for the sector", added Duncan Johnston, UK manufacturing industry leader at Deloitte.

Neil Lloyd, sales director at law firm, FBC Manby Bowdler, observed: "The strong performance this month should come as no surprise".

Optimism is still relatively strong, with more than 51% of firms expecting production to rise over the coming year, reflecting global expansion efforts, efficiency drives and fresh investment plans.

Higher new orders, and a subsequent rise in production requirements, encouraged firms to increase their purchasing activity at the end of the third quarter.

The Bangko Sentral ng Pilipinas (BSP) on Friday last week estimated that inflation likely clocked 2.8-3.6% in September from August's 3.1%, while BusinessWorld's poll of 13 economists yielded a 3.2% median. Also positively, job creation increased again, but we are continually hearing that the shortage of skills is holding the sector back. "There were also reports of rising cost inflation affecting production levels", added Aw.

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