Factory production growth slows down
Factory production rose at a slower pace of 7.5 percent in November last year on weak global demand, data from the Philippine Statistics Authority show Tuesday.
The PSA said in its Monthly Integrated Survey of Selected Industries that the growth in the volume of production index, which represented the output of 20 biggest manufacturing sectors, decelerated from 9.1 percent posed in November 2014.
The expansion recorded in November, however, was faster than the revised 1.7 percent growth recorded in October last year.
“The increased growth in manufacturing despite the continued weak global demand shows the resiliency of our domestic economy. This could also potentially support stronger fourth-quarter 2015 growth of the industry,” said Economic Planning Secretary Arsenio Balisacan.
He added the sector was expected to grow further until December 2015 on the back of robust domestic demand, increased inflow of remittances, stable inflation and low fuel prices.
“We must aggressively pursue efforts to encourage innovation to help the manufacturing sector realize its potential as driver of economic growth. We have to explore and invest in new technology to enhance existing product base to maintain competitiveness in the regional and global market,” said Balisacan.
Factory output growth in November was pushed by double-digit expansion
registered by seven major sectors. Tobacco production rose 53 percent; machinery except electrical, 29.6 percent; basic metals, 25 percent; leather products, 24 percent; electrical machinery, 20 percent; petroleum products, 12.5 percent; and footwear and wearing apparel, 12 percent.
The growth in the value of production index, meanwhile, slowed to 1 percent in November from a 6.9-percent expoansion in November 2014. The rise, however, was a reversal of the seven months of consecutive contraction in the VaPi since April 2015.
Tobacco maintained its robust growth in November 2015, posting a 52.7- and 54.1-percent growth rate in volume and value of production, respectively, despite the slowdown from its three-digit expansion in the previous month.
The food subsector continued to decline in both production volume and value, registering a contraction of 10 percent in volume and 9.8 percent in value.
The drop was traced to the low demand for tuna products, low supply of agar, and inadequate supply of raw materials for the production of vegetable and animal oils.
Leather goods posted a double-digit growth of 23.7 and 24.9 percent in volume and value of production, while basic metals increased 25 percent and 11 percent, respectively, sustaining the robust growth from the previous month and offsetting the negative performance since May.
The transport sector also grew 9.5 percent in volume and 8.7 percent in value due to the sustained strong sales in passenger and commercial vehicles.
The average capacity utilization slightly grew to 83.6 percent from 83.5 percent last year, with basic metals posting the highest rate of 88.6 percent.