Factory production in September likely grew faster than the 3.7-percent expansion in August, Moody’s Analytics, a division of Moody’s Corp., said Friday.
Moody’s said in a report it expected manufacturing in September to post a growth of 3.9 percent, higher than the 3.2-percent increase registered a year ago. The government is set to release the September manufacturing data on Nov. 6.
“The Philippines’ industrial production likely improved in September from August’s 3.7 percent year-on-year gain, thanks to a lower base effect,” Moody’s said.
The growth in manufacturing decelerated sharply in volume and value in September 2014, from double-digit rates a year earlier, as more than half of the 20 major sectors posted declines.
The volume of production index managed to grow by just 3.2 percent year-on-year in September 2014, compared with a stronger 19-percent increase a year ago.
Moody’s said despite the positive outlook for September, food production would continue to be challenged by the dry conditions associated with the El Niño phenomenon, while export-facing industries such as electronics were under pressure from weak global demand, particularly from China.
Manufacturing in August rebounded from a three-month decline, led by vigorous construction activity and high demand for automotive products.
The volume of production index rose 3.7 percent in August, a big improvement from its performance in the past three months. However, it remained behind the 5.7-percent growth it
posted in the same month last year.
National Economic and Development Authority director-general Arsenio Balisacan earlier said the link between the agriculture and manufacturing sectors should be continuously strengthened to reduce the economy’s vulnerability to external supply shocks.
Meanwhile, the value of production index declined 4.6 percent in August, pulled down by softer prices of products.
For consumer goods, manufacture of beverages led the growth in value of net sales, as it posted a 19.1-percent growth in August. Tobacco also posted a double-digit growth in both value and volume of net sales.
The food subsector dropped further in both value and volume of net sales, due to the persistent decline in the production values of vegetable/animal oils and fats, grain mill products, processed meat and fish, milk and dairy products.
For intermediate goods, wood posted a double-digit growth of 37.9 percent and 11.8 percent in volume and value of net sales. Meanwhile, non-metallic mineral products sustained double-digit growth of 28.6 percent and 21.1 percent in volume and value of net sales on sustained demand for construction-related materials from both the private and public sector.
Petroleum production continued to slip, posting a 25-percent drop in value of net sales due to an oversupply in the global market.
For capital goods, fabricated metal products grew by 22.3 percent and 24.2 percent in volume and value of net sales respectively. However, net sales of basic metals continued to contract with 28.1 percent in volume and 37.9 percent in value due to the decrease in production of non-ferrous metals and an oversupply of basic metals globally.