The country’s manufacturing purchasing managers’ index (PMI) dipped further in the last month of 2020, but business confidence was the highest in 10 months, IHS Markit reported on Monday.

The PMI takes into account new orders, output, employment, suppliers’ delivery time, and stocks. 

“Firms registered a modest contraction in output volumes amid ongoing restrictions implemented to curb the surge in coronavirus disease 2019 (Covid-19) cases,” IHS Markit said.

The survey attributed further deterioration of the local manufacturing sector to job reductions while new orders were broadly unchanged.

Scores below 50 show deterioration of the sector while a score above 50 reflects improvement.

“Job shedding persisted at a strong rate which firms linked to restructuring efforts and voluntary resignations,” the IHS Markit survey added.

On the other hand, the report said demand for exports continued to expand, rising for four straight months in December 2020.

“That said, positives can be drawn from the latest survey findings; new orders neared stability and sentiment recovered to levels seen before the start of the pandemic. At the same time, case numbers have moderated with expectations that restrictions will ease over the coming months,” IHS Markit economist Shreeya Praya said.

Business sentiments continue to improve in the last month of 2020, posting the highest confidence since February last year.

The survey said the improvement in business sentiments was fueled by higher hopes of manufacturers to see greater demand this year. CURRENTPH