Slower industrial production in November seen

MANILA, Philippines–Factory output growth likely slowed in November amid a softening consumer demand and weather disruptions during the month, think tank Moody’s Analytics said.

In a new research note, Moody’s Analytics, an affiliate of rating firm Moody’s Investor Service, said prospects for production would improve in 2015 as the US economy strengthens.

“Consumer demand has cooled in the second half of the year, dampening food manufacturing,” the company told clients.

“Bad weather associated with the typhoon season will affect food supplies and production through December,” it added.

In November, Moody’s said the growth in industrial production likely slowed slightly to 7.2 percent in terms of volume from 7.5 percent in October. In terms of value, industrial output in October grew by 7.2 percent.

Last year, factory output in October rose by 14.1 percent in terms of value and 21.1 percent in terms of volume, government data showed.

“Improved global technology demand will lift electronics production in 2015,” Moody’s said.

Stronger demand for electronics will benefit the Philippines, given that most of the country’s merchandise exports are made up of semiconductors and other computer components.

Earlier, Moody’s said the growth of industrial production locally had slowed, mirroring the overall weakness in the economy. In the third quarter of the year, Philippine gross domestic product (GDP) rose by just 5.3 percent, the slowest since 2011.

The slowdown was attributed mainly to lackluster government spending as smaller agencies failed to find ways to make use of disbursements from the state.

Moody’s said the recovery of advanced companies, particularly major trading partners like the United States, should continue to translate into more demand for exports from the Philippines.

Data out of the US showed the American economy grew by 3.9 percent in the third quarter, beating the average forecast of 3.3 percent.

Reflecting the slowdown in the growth of factory output, the country’s exports sector also slowed this year due to softer demand from major trading partners such as China, Japan and Europe. The improvement in the US market was not enough to offset the slump in China, Japan and Europe.

In October, exports rose by just 2.9 percent, the slowest pace in half a year.