MANILA, Philippines — Barcelona-based think tank FocusEconomics sees the country’s manufacturing output growing steadily over the next two years as firms ramp up production.
Lindsey Ice, economist at FocusEconomics, expects manufacturing output to increase 7.1 percent in 2019 and 6.9 percent in 2020.
Ice said the manufacturing Purchasing Managers’ Index (PMI), produced by Nikkei and IHS Markit, dipped to 53.2 points in December from 54.2 points in November.
“Despite the softer print in December, the average for the fourth quarter was the strongest of the year. Moreover, the index remained above the critical 50-point threshold that separates expansion from contraction in the manufacturing sector,” she added.
Output continued to rise at an above-average pace in December, albeit at a slower rate than November.
New business inflows were also solid despite softening from the surge seen in November, Ice said.
“The fourth consecutive decline in export orders signaled weaker external demand and confirms the continued expansion has predominantly been driven by the domestic economy. Sustained demand led firms to marginally raise staff levels and also scale up purchasing activity, although at a notably softer rate than in recent months. Consequently, inventories also ticked up in December,” she said.
The economist said backlogs of work fell again in December but to the smallest extent in over two-and-a-half years.
Supply chain constraints persisted in the month as repeated anecdotes of port congestion caused supplier delivery times to lengthen for the fifth month running, she said.