Factory output growth possibly slowed in October, the economic research arm of Moody’s Investors Service said, given weak global demand and the El Nino weather phenomenon having weighed on food manufacturers.
Ahead of next week’s release of official manufacturing data, Moody’s Analytics forecast October growth of 3.2 percent, down from September’s 3.5 percent and the 8.7 percent recorded a year earlier.
“Food production has been under pressure from dry conditions associated with El Niño,” Moody’s Analytics said in a weekly outlook, noting that food is the largest component of the industrial production survey.
“Export-oriented sectors including electronics have also been struggling on weakened global demand, especially stemming from China, Asia’s regional tech hub,” Moody’s Analytics added.
Manufacturing output as measured by the Volume of Production Index grew in September from August’s revised 1.9 percent. The expansion was attributed to robust demand and improvements in tobacco, transport equipment, and construction activity
The National Economic and Development Authority at that time said it expected growth to further gain strength due to the holiday season and the approaching May 2016 national elections.
“This makes business leaders anticipate increased orders and sales, which will boost both the production and sales of manufactured goods,” it claimed.