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Economy lost more steam in January, report says

The nation's economy continued to slow in January, with the index of leading indicators down 2.1 percent from December, the Council for Economic Planning and Development (CEPD) reported yesterday.

The index of leading indicators, composed of seven components and designed to gauge economic activity for the next three months, showed that only working hours in the manufacturing sector improved in January, the CEPD said.

The other six components -- namely the wholesale price index, the growth of the M1B money supply, the change in the stock market index, the approval of property construction, the growth of new orders by manufacturers and the value of exports clearing customs -- worsened in January from the previous month, the CEPD added.

The council also said the total score of monitored indicators in January fell to 24 points from 26 points in December, signaling a "green light" that points to steady growth of the economy.

The CEPD uses a five-level spectrum to gauge domestic economic health, with blue indicating recession, yellow-blue a slowdown, green steady growth, yellow-red a slight overheating and red a serious overheating.

The index has been at the "green light" level since October, easing down from "yellow-red" levels in the previous four months. In May, the indicator flashed the first "red" light reading since December 1994 before easing in June.

Looking ahead, most domestic companies are optimistic about the economic climate in the next three months, with 60 percent of companies questioned being neutral about their business outlook in the first quarter of this year, while 23 percent were positive and 17 percent negative, according to a government poll released yesterday.

In December, 71 percent of companies questioned said they were neutral about their business outlook in the next three months.
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