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Business

Factory activity slows in January

Louella Desiderio - The Philippine Star
Factory activity slows in January
Photo shows workers at a textile factory in Manila.

Growth in new orders ease

MANILA, Philippines — Philippine manufacturing activity in January expanded at its slowest pace in five months as growth in new orders eased.

In a statement yesterday, S&P Global said the Philippines’ manufacturing purchasing managers’ index (PMI) stood at 52.3 in January, down from December’s 32-month high of 54.3.

“While signaling a solid improvement in the health of the Filipino manufacturing conditions, the headline index was at a five-month low,” S&P Global said.

The PMI, which is a measure of manufacturing performance, is based on a survey of around 400 manufacturers and takes into account new orders, output, employment, suppliers’ delivery times and stocks of purchases.

An above 50 PMI reading indicates an overall increase compared to the previous month, while below 50 denotes a contraction.

S&P Global said demand for Philippine goods continued to improve in January, but the pace of growth in new orders slowed from the recent high recorded in December.

The manufacturing sector’s output also posted growth in January, but at a weakened pace from December.

Despite challenges, manufacturers raised their purchasing activity on expectations of higher sales in the coming months.

Employment in the manufacturing sector was broadly unchanged as hirings were offset by resignations.

“If demand trends continue to improve as they have done, then employment growth could be on the cards in the months ahead,” S&P Global Market Intelligence economist Maryam Baluch said.

When it comes to prices, rising costs of materials and transportation were passed on by manufacturing firms to their clients.

For the coming year, Philippine manufacturers are optimistic that their output would grow as they expect market demand to improve, as well as a boost from the upcoming elections.

“We could see 2025 shaping up to be another strong year of growth for the Philippines manufacturing sector with industrial production growth forecasted at 3.9 percent in 2025, up from 2.4 percent in 2024,” Baluch said.

In anticipation of greater demand, she said manufacturers have already increased their inventory levels.

MANUFACTURING

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