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Philippines manufacturing sector expands noticeably slower

Staff Writer |
The Philippines manufacturing economy continued to expand in January but at a noticeably slower rate.

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Marked slowdowns in output growth and new work inflows were key factors. Slower expansion led to keener cost management amid ongoing inflation. Firms barely added to their staffing levels, partially due to spare capacity, and reduced growth of input buying and inventory accumulation.

Companies also faced higher input costs, prompting them to raise their own prices further. Encouragingly, business expectations for output over the next 12 months remained high.

The seasonally adjusted headline Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) signalled the fourth monthly slowdown in sector growth, registering at 52.7 in January from 55.7 in December.

Dampening the headline index was a further loss of growth momentum in new orders, output, and inventory levels. The latest slowdown in new orders and output was linked in part to price increases restraining demand.

Slower growth in order book volumes was not limited to the domestic market as growth in new export orders also decelerated.

January data indicated a slightly more cautious approach to inventory accumulation, with companies recording slower increases in holdings of finished goods and pre-production stocks.

This was accompanied by notably reduced growth in acquisitions of raw materials and semimanufactured goods. â– 

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