PH manufacturing output drops

MANUFACTURING declined 1.1 percent in July 2017 from a 12.1-percent expansion year-on-year, pulled down mostly by double-digit decreases in the output of chemical products, textiles and rubber and plastic products, data from the Philippine Statistics Authority on Tuesday show.

“Eight out of the 20 major sectors registered annual declines, with two-digit decreases noted in the following major sectors: chemical products (-52.6 percent), textiles (-20.3 percent), and rubber and plastic products (-13.9 percent),” the agency said.

The 1.1-percent decline in July was a reversal of the 6.8-percent growth in the previous month.

Economic Planning Secretary Ernesto Pernia, however, remained optimistic of the growth of manufacturing in the fourth quarter.

“We expect higher manufacturing outputs in the coming months as we expect an increase in consumer demand during the holiday, translating to higher production in volume and sales,” he said.

He said strong macroeconomic fundamentals, acceleration of infrastructure development projects, and increased investment would further provide additional support to manufacturing growth.

Pernia recommended an expansion of existing manufacturing enterprises and more foreign and local investments in the countryside to sustain manufacturing growth. 

The value of production index (VaPI) for manufacturing dropped 2.0 percent in July  compared with a 7.7-percent growth on year. 

Seven major sectors showed decreases in VaPI, with three major sectors mainly contributing to the downtrend, namely: chemical products (-54.2 percent), textiles (-23.6 percent) and rubber and plastic products (-19.1 percent).

Similarly, the Volume of Net Sales Index posted year-on-year contraction of 8.1 percent in July. The contributing factors were the decreases in VoNSI exhibited by three major sectors, with considerable reduction observed in chemical products (-55.1 percent), footwear and wearing apparel(-22.5 percent) and non-metallic mineral products (-18.0 percent).

The Value of Net Sales Index, meanwhile, declined 9.0 percent in July from 3.8 percent during the same month of the previous year. 

Three major sectors showed two-digit decreases in VaNSI led by chemical products (-56.1 percent), followed by non-metallic mineral products (-23.4 percent) and footwear and wearing apparel (-22.0 percent).

The average capacity utilization rate in July for total manufacturing was recorded at 83.7 percent. Sixty percent or 12 of the 20 major industries operated at 80 percent and above capacity utilization rates. 

The proportion of establishments that operated at full capacity (90 percent to 100 percent) was recorded at almost one-fourth of the total number of establishments (24.8 percent) in July 2017. 

About 55.3 percent of the total establishments operated at 70 percent to 89 percent capacity, while almost one-fifth of the total establishments (19.9 percent) operated below 70 percent capacity.

Topics: Philippine Statistics Authority , Manufacturing , Economy
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