Factory output grows 1.9%

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Local manufacturers in January grew their output by 1.9 percent, faster than the 1.6 percent Volume of Production Index (VoPI) growth registered in December.

The Philippine Statistics Authority (PSA) said the expansion in January was mainly brought about by the slower annual drop in the manufacture of computer, electronic and optical products at 7.1 percent, compared with the double-digit decline of 16.5 percent in the previous month.

“The manufacture of computer, electronic and optical products contributed 28.9 percent to the uptrend of VoPI for the manufacturing section in January,” it said.

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This slower decline in manufacturing volume output was also attributed to the slower decline in manufacturing of beverages at 0.3 percent compared to 14 percent in December, and the recovery of growth in the manufacture of fabricated metal products, except machinery and equipment at 11.5 percent, from an 11.7 percent contraction in December.

“Of the remaining 19 industry divisions, eight registered year-on-year increases in January 2024. In contrast, 11 industry divisions posted annual declines during the period,” the PSA said.

The highest annual drop was observed in manufacture of textiles at 31.5 percent.

The value of these produce, Value of Production Index (VaPI), meanwhile posted a 0.9 percent increase, slower than the 2.2 percent growth recorded in the prior month.

The PSA said the slower growth was primarily due to the drop in the manufacture of basic metals industry at 6.6 percent growth in January, compared to 16.8 percent in December.

“The manufacture of basic metals contributed 34 percent to the deceleration in the annual increase of VaPI for the manufacturing section in January 2024,” the PSA said, noting it as the fifth industry with the highest weight in the VaPI computation out of 22.

Other primary contributors to the slower year-on-year growth of VaPI in January 2024 were the annual decline of manufacture of transport equipment at 2.9 percent from an annual increase of 12.7 percent in the previous month, and the slowdown in the annual increment of manufacture of electrical equipment at 11.3 percent in January 2024 from 41.0 percent in the previous month, the PSA said.

The PSA also reported that sales of manufacturers contracted by 5.1 percent for the period, faster than the 1.4 percent contraction of Value of Net Sales Index (VaNSI) recorded in December.

“The faster year-on-year decline of VaNSI during the month was primarily brought about by the annual decrease in the manufacture of basic metals industry division at 21.4 percent from 11.5 percent. The manufacture of basic metals contributed 55.1 percent to the trend of VaNSI,” the PSA said.

Other main contributors to the faster annual decline of VaNSI in January were the annual drop in the manufacture of electrical equipment industry division at 8.4 percent, from a double-digit annual increment of 20.3 percent in the previous month, and the slowdown in the annual increase of manufacture of fabricated metal products, except machinery and equipment at 8.8 percent during the month, from a double-digit annual growth rate of 22.9 percent in the previous month.

The PSA said sales volume, Volume of Net Sales Index (VoNSI), grew 4.2 percent compared to a 2 percent contraction in December.

The PSA pointed to the manufacture of basic metals, manufacture of food products, and manufacture of transport equipment as the top three industry that contributed to the overall growth of VoNSI.

Factories posted a 74.5 percent utilization rate for the period, up from 74.4 percent the previous month.

“Almost all industry divisions reported capacity utilization rates of more than 60.0 percent during the month, except the manufacture of basic pharmaceutical products and pharmaceutical preparations (55 percent),” PSA said.

The top three industry divisions in terms of reported capacity utilization rate were manufacture of furniture at 88.7 percent, manufacture of transport equipment at 86 percent, and manufacture of rubber and plastic products at 82.4 percent.

The PSA also reported that the proportion of establishments that operated at full capacity (90 percent to 100 percent) was 26.7 percent of the total number of responding establishments.

It said 37.6 percent operated at 70 to 89 percent capacity, while 35.7 percent operated below 70 percent capacity.

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