Omicron Variant Slows Philippine Construction Industry
Last month, fewer Philippine construction companies were impacted by supply chain issues, although activity in the sector dropped to its lowest level in three months in the aftermath of the Omicron variant’s emergence. IHS Markit and the Chartered Institute of Procurement and Supply (CIPS) released their latest purchasing managers’ index (PMI) for the Philippine construction sector in December, which showed a score of 54.3, down from 55.5 in November.
For the first time since February, civil engineering activity fell, while commercial sector growth stalled. Only housebuilding witnessed an increase in December, according to the report. Numerous responders noted disruption caused by COVID-19 cases, which reached new highs last month due to the fast spread of the Omicron strain.
Tim Moore, director at IHS Markit mentioned that the Philippine construction sector concluded last year on a somewhat weaker footing as continued pandemic restrictions slowed the recovery, particularly in commercial and civil engineering projects. As with the manufacturing and services PMIs announced earlier this month, the construction survey indicated a lessening of the very high-cost constraints experienced by businesses.
The survey’s indicator of supplier delivery times increased to its highest level since November 2020, indicating that supply networks are experiencing less interruption. Nevertheless, Moore noted that in December, construction supplies and materials availability continued to improve, indicating that the worst of the supplier delays had passed.
The all-sector PMI, which includes readings from construction, manufacturing, and services across a week, dropped to 53.6 in December from 57.4 in November, its lowest level since February and mostly reflecting the impact of Omicron’s spread on consumer-facing enterprises.
Moore, however, pointed out that despite catching up on backlogs and enhancing capacity, reports consistently referred to transportation issues and driver shortages as unresolved. It is believed that the nation is short of 100,000 HGV drivers due to a variety of factors, such as Brexit, poor working conditions, and fewer driving tests. Builders and Construction Associations warned in October that HGV shortages were one of the main factors affecting the Philippine construction industry.
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