NSO reports drop in production

Factory output dropped 0.2 percent in June 2011 from that of the same month last year, the National Statistics Office (NSO) said Thursday.

Economists said that the drop could be noted across several sectors, particularly semi-conductor, electronics and electronic products.

The NSO said production was dragged down by a slowdown in the manufacture of machinery (except electrical), wood and wood products, transport equipment, basic metals, publishing and printing, and leather and food products.

Cid L. Terosa, an economist with the University of Asia and the Pacific, said that factory output could recover in the coming months because of the traditionally brisk consumer spending in the fourth quarter of the year.

However, Dr. Benjamin E. Diokno, former budget secretary and a professor at the University of the Philippines, said in an email that the 0.2-percent drop was a “disappointment,” considering the “modest” 1.9 percent increase in May.

The NSO said that machinery (except electrical), wood and wood products, transport equipment, basic metals, publishing and printing, leather products and food manufacturing pulled down the overall output in manufacturing.

On a month-on-month basis, the statistics office said, factory output fell 2 percent in June compared with the 5.6 percent reported the previous month.

The agency attributed this to diminished production output of miscellaneous and petroleum products, as well as machinery except electrical.

The average capacity utilization in the manufacturing sector stood at 83.2 percent in June 2011.

Eleven of the 20 major sectors registered capacity utilization rates of 80 percent and more, the NSO added.

These were basic metals, petroleum products, food manufacturing, non-metallic mineral products, electrical machinery, paper and paper products, chemical products, rubber and plastic products, miscellaneous manufactures, machinery (except electrical) and textiles.

About 16.8 percent of establishments operated at full capacity (90 to 100 percent) in June 2011, NSO said.

About 60.3 percent of establishments operated at 70 to 89 percent capacity, while 22.9 percent of factories operated below 70 percent capacity.—Riza T. Olchondra