Manufacturing grew faster in August, as the economy continued to recover from the global health crisis, data from the Philippine Statistics Authority show.
The PSA said the volume of production index rose 3.5 percent in August from a year ago, higher than the expansion of 2.4 percent in July.
“Out of the 22 industry divisions, 17 reported positive annual growths which was led by manufacture of machinery and equipment except electrical with 78.0 percent annual growth rate. On the contrary, five industry divisions posted annual decreases with manufacture of electrical equipment exhibiting the fastest annual drop of -49.3 percent,” the PSA said.
Meanwhile, the value of production index continued to register a double digit growth at 11 percent in August, following July’s 10.6 percent.
“Contributory to the increase of VaPI were the annual growths exhibited by 18 out of the 22 industry divisions. Among these, the manufacture of machinery and equipment except electrical posted the highest annual growth rate of 77.4 percent in August 2022,” the PSA said.
The PSA said the average capacity utilization rate for the manufacturing sector slightly increased in August to 71.4 percent from 71.3 percent in July.
It said 20 of the 22 industry divisions registered more than 60-percent average capacity utilization rates, led by manufacture of furniture (83.3 percent), computer, electronic and optical products (81.7 percent), and wearing apparel (79.3 percent).
Rizal Commercial Banking Corp. chief economist Michael Ricafort earlier said elevated inflation and rising interest rates were two of the risk factors that could drag manufacturing growth.
Ricafort said these factors could, “increase borrowing and financing costs including for new investments and expansion for some manufacturers.”
He also cited the risk of recession in the US, the world’s biggest economy, that could slow down global trade and manufacturing.
Other risks are the continued lockdowns in China which could affect global economic and manufacturing activities and the continued Russia-Ukraine conflict that already led to relatively higher global commodity prices and some disruption in the global supply chains.