Philippines PMI January 2017


Philippines: Manufacturing PMI weakens in January

February 1, 2017

The Philippines’ manufacturing industry remained in expansionary territory at the beginning of 2017, despite weakening. The manufacturing Purchasing Managers’ Index fell from 55.7 in December to 52.7 in January, according to a release provided by Nikkei and IHS Markit. The index nevertheless remains above the 50-threshold, which indicates an expansion in the manufacturing sector.

January’s slowdown came on the back of slower growth in both output and new orders. In addition, employment barely increased and backlogs of work declined. Regarding price development, Bernard Aw, economist at IHS Markit, commented: “firms continued to experience sharp cost inflation, aggravated by a weak peso and broadly higher global commodity prices. Although some of the additional cost burdens were passed on to clients, as highlighted by a further increase in output prices, the gap between input cost inflation and charge inflation is widening. If this continues, manufacturers’ profitability may be at risk. Already, some companies are delaying input purchases due to higher prices.”

FocusEconomics Consensus Forecast panelists see manufacturing rising 5.9% in 2017, which is down 0.5 percentage points from the previous month’s estimate. For 2018, the panel expects manufacturing to increase 5.9%.

Author: Massimo Bassetti, Economist

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Philippines PMI Chart

Philippines PMI January 2017

Note: Nikkei Indonesia Manufacturing Purchasing Managers’ Index. Readings above 50 indicate an expansion in the manufacturing sector while readings below 50 indicate a contraction.
Source: Nikkei and IHS Markit.

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