Factory output contracted for the 11th consecutive month in January, data released by the Philippine Statistics Authority (PSA) yesterday showed.
The Monthly Integrated Survey of Selected Industries showed the Volume of Production Index (VoPI) continued to drop at an annual rate of 16.7 percent in January 2021, faster than the 12 percent decrease registered the previous month.
In January 2020, the annual increase of VoPI was recorded at 1.9 percent.
The PSA said the faster downturn in VoPI was due to the annual decreases of 18 industries led by manufacture of wood, bamboo, cane, rattan articles and related products (-53.4 percent), manufacture of machinery and equipment except electrical (-48.9 percent) and manufacture of tobacco (-42.6 percent).
The Value of Production Index (VaPI) for manufacturing sector reflected an annual decrement of 21.1 percent in January 2021, from its previous month’s annual drop of 15.4 percent.
In January 2020, VaPI decreased by 1.7 percent.
The PSA said contributory to the faster decline of VaPI for manufacturing sector in January 2021 were the reductions in the indices of 18 out of the 22 industry divisions.
The industry divisions that led the contraction of VaPI were manufacture of wood, bamboo, cane, rattan articles and related products (-53.5 percent), manufacture of coke and refined petroleum products (-53.1 percent) and manufacture of machinery and equipment except electrical (-51 percent).
“Based on responding establishments, the average capacity utilization rate for the manufacturing sector in January 2021 was at 46.1 percent from 49.1 percent in the previous month,” the PSA said.
“The proportion of establishments that operated at full capacity (90 percent and up) was 20.9 percent of the total number of responding establishments,” it added.
Meanwhile, First Metro Investment Corp. and the University of Asia and the Pacific capital markets research in a report released yesterday said the manufacturing sector looks set to lead the recovery in the first quarter, as purchasing managers index in January showed an expansion from the previous month.
“This will be positive for employment generation since the sector’s output has high multiplier effects,” the latest issue of the Market Call said.
The report said the construction sector may wait until the second quarter to get into high gear as small- to medium-size contractors in infrastructure projects struggle financially, while demand for commercial buildings and condominiums has contracted.