United States manufacturing activity picks up in September - IHS Markit

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Canadian manufacturers indicated a solid degree of job creation in September, the report said, although the rate of employment growth eased from August's survey-record high.

The Vietnam Manufacturing Purchasing Managers' Index (PMI) rose in September, with faster rises in output, new orders and employment on the back of stronger customer demand.

By contrast, euro zone factories had their best month since early 2011.

"The Philippines' manufacturing economy ended the third quarter on a weak note, with the PMI signalling a second consecutive month of subdued growth", the report quoted IHS Markit Principal Economist Bernard Aw as saying.

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". Readings above 50 signal an expansion while readings below the benchmark signal a contraction. "Latest data indicated only a marginal rise in new orders from overseas, which was partly linked to weak demand from USA clients".

"The weakened pound could also encourage some companies to switch to domestic sources for supplies, which would help manufacturers of intermediate products".


"However, the manufacturing economic output results for the third quarter, due later this month in the preliminary GDP estimate, will reveal more about the health of the sector which saw a decline in output in the second quarter". Aw added, referring to the peso's persistent weakness against the greenback.

"Not only did the cheaper currency fail to provide a boost to exports, it raised the costs of imports", Aw pointed out. 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.

IHS Markit director Rob Dobson said rising cost pressures are likely to impact company profit and could disrupt production in the short term. The upturn signalled a slight pick-up in growth momentum and a strong improvement in overall operating conditions across the sector.

In response to lower output requirements, local manufacturing companies reduced their staffing levels (payroll numbers), albeit fractionally, at the end of Q3-2017.

"However, optimism regarding output remained high, encouraging firms to increase purchases of inputs", he said.

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