Philippine PMI inches up to 50.8 in September

Lucy Hill
October 3, 2017

Currency weakness was reportedly the main reason leading to higher input costs (the rupiah being under pressure - like other emerging market currencies - amid renewed U.S. dollar strength).

The PMI is a composite index representing the weighted average of five sub-components: new orders, output, employment, suppliers' delivery time and stocks.

The British pound weakened against other major currencies in the European session on Monday after data showed that the United Kingdom manufacturing sector continued to expand in September, albeit at a slower pace compared to August.

Experts say the weaker data may not be enough to dampen prospects of an interest rate hike by the Bank of England at their next meeting in November, but it could impact on further increases next year. Sales have increased to Europe, China, the US and South America. Both input and output costs are rising at a greater rate ad this has again increased vendor lead times to the longest for nearly six and a half years.

Strong demand for goods manufactured in Turkey reflected positively in the data, the report revealed.

After declining in August, export orders increased last month even as "the degree of expansion was the mildest since the survey started in January past year".

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The majority of the surveyed companies still expect output to rise in the next 12 months on the back of new product launches, an improving economic climate, marketing activity and business expansions. However, the flipside comes in the form of the increasing cost pressures that manufacturers in the United Kingdom face from Sterling weakness, which in turn increases the cost of imports.

"A marked acceleration in the rate of input cost inflation was recorded, linked to higher prices for raw materials, including those sourced from China".

"The weak peso continued to pose a problem for manufacturers", Mr. Will they be able to absorb these rising costs, or will they need to be passed on to the end user? "There were also reports of rising cost inflation affecting production levels".

This is despite the modest sales trend and renewed growth in overseas orders.

Manufacturers also cited a supportive economy and were more confident about the year ahead, with the future output gauge up at 68.1 from 65.1.

Other reports by TheDailyFarc

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