By The Manila Times
The December 2024 Purchasing Managers’ Index (PMI) report brings encouraging news for the Philippine economy, showing steady growth and resilience after a year of ups and downs. The PMI, which tracks the health of key sectors like manufacturing, retail and services, stood at 54.29 for December, signaling that businesses are growing faster compared to November.
The Purchasing Managers’ Index (PMI) is a vital economic indicator that provides insights into business conditions across key sectors such as manufacturing, retail-wholesale, and services. It is derived from monthly surveys of private-sector companies and tracks variables like production, new orders, employment and inventories. A reading above 50 signifies expansion, while a reading below 50 indicates contraction.
The PMI Philippines project is a collaborative effort by the Philippine Institute for Supply Management (PISM), its advocacy arm, the Foundation of the Society of Fellows in Supply Management (SOFSM), and I-Metrics Asia-Pacific Corp. This initiative aims to equip industries, policymakers and stakeholders with actionable insights to support strategic decision-making and economic growth.
What happened in December 2024?
In December, the manufacturing sector stood out with a PMI of 54.46, reflecting continued expansion and strong demand. Production and new orders rose significantly during the holiday season as manufacturers ramped up activities to meet increased consumer demand. Inventory levels also grew, signaling confidence in future demand. However, employment in manufacturing showed only modest improvements, highlighting caution among employers about long-term hiring.
The retail-wholesale sector recorded a PMI of 51.94, showing modest growth compared to earlier months. This improvement was driven by increased purchases and sales during the holiday shopping season, which helped stabilize the sector. However, employment in retail-wholesale remained a concern as businesses reported reductions in workforce levels. Rising operating costs also posed challenges, pushing retailers to find ways to optimize their inventory management and streamline operations. While the sector showed resilience, there is room for improvement, particularly in workforce stability and operational efficiency.
The services sector maintained steady expansion, with a PMI of 54.47 in December. This growth was supported by strong business activity and new orders, particularly in IT, hospitality and financial services. The demand for consumer-facing services remained high, contributing to the sector’s resilience. However, rising operating costs continued to weigh on businesses, with many prioritizing efficiency over workforce expansion. While the services sector showed steady growth, addressing cost pressures and labor challenges will be critical for sustained performance in 2025.
READ the full story HERE.
