Growth in Philippine manufacturing output slowed sharply in volume and value to the 3-percent levels in September from double-digit rates a year earlier, with more than half of the 20 major sectors posting declines, the Philippine Statistics Authority (PSA) said in its latest report.
The Volume of Production index (VoPI) climbed by 3.2 percent year-on-year in September, compared with a much stronger 19.0 percent increase recorded in the corresponding period last year, the latest results of the Monthly Integrated Survey of Selected Industries (MISSI) by the PSA showed on Tuesday.
Eleven major sectors posted “negative year-on-year growth in terms of volume, offsetting the gains during the month,” the PSA report said.
Justino Calaycay, an analyst at the Accord Capital Equities Corp. noted that manufacturing output in September may have been affected by the export sector, which has seen some recovery but remains a bit “shaky.”
“While we have seen a steady rise in consumer spending, the export sector, albeit already recovering from the doldrums of the previous periods, is still a bit shaky, particularly as external demand continues to be challenged by the economic conditions in our principal markets,” Calaycay said, referring to the 15.7 percent rebound in merchandise exports in September.
“So this could be a factor that played into the numbers that came out slower for September,” he added.
The analyst, however, believes that the onset of the holiday season may cause an uptick in manufacturing output in the coming months.
Production volume declined in the following sectors: electrical machinery, food manufacturing, transport equipment, footwear and wearing apparel, rubber and plastic products, tobacco products, miscellaneous manufactures, chemical products, wood and wood products, furniture and fixtures, and basic metals, it said.
On the other hand, six major sectors “exhibited two-digit growth in production output, with printing constantly influencing the increment with 195.4 percent.”
The five other sectors that posted two-digit increases in volume were beverages, fabricated metal products, leather products, petroleum products, and machinery, except electrical.
In terms of the Value of Production Index (VaPI), manufacturing output grew 3.8 percent, decelerating from a 10.9 percent rise a year earlier.
“This may be explained by the decline in production value of the transport equipment industry,” the PSA said.
But the PSA added that increases in VaPI were led by printing, “with 195.4 percent for September and showing consistent three-digit growth since May 2014.”
Other major sectors that posted two-digit increases in VaPi terms were beverages, fabricated metal products, leather products, and petroleum products.
On the losing side were electrical machinery; transport equipment; footwear and wearing apparel; basic metals; food manufacturing; miscellaneous manufactures; rubber and plastic products; wood and wood products; furniture and fixtures; and chemical products.
Production capacity utilization
Production capacity utilization in September for all forms of manufacturing stood at an average 83.5 percent, with more than half of the 20 major industries registering capacity utilization rates of 80 percent or more.
Similar to the slower VoPI and VaPI results, the Volume of Net Sales Index and Value of Net Sales Index, two additional indicators compiled by the MISSI, also grew at slower rates in September.
The net sales volume in September increased 1.2 percent, compared with a robust 33.6 percent pace recorded last year, while net sales value posted a minimal 1.8 percent rise, losing much pace from the 24.5 percent achieved in the year-earlier period.