Manufacturing sector down in August

Annual growth in factory output slowed down to 2.1 percent in August, according to data from the National Statistics Office.

NSO reported Wednesday that the 2.1 percent growth in factory production for August 2011 was slower than the 4.6 percent annual growth posted in July 2011 and much weaker than the 25.5 percent in August 2010.

According to the NSO report, factory output this year has been on a generally downward path, although there was double digit growth in January (14.4 percent), February (11.1 percent) and March (10.1).

Economists said the number for August suggests a weak performance for the manufacturing sector in the third quarter, caused by lower market demand for products as well as government underspending.

“It is the usual slowdown that was made slower by weak demand in both domestic and international markets. The slow pace of government spending also slowed down demand for several manufacturing commodities,” Dr. Cid L. Terosa of the University of Asia and the Pacific said in a text message.

“The recent MISSI [monthly integrated survey of selected industries] numbers suggest a sharply slowing Philippine manufacturing,” Dr. Benjamin E. Diokno of the UP School of Economics said via e-mail. “The numbers are consistent with the depressing electronics exports performance and serious government underspending in public infrastructure.”

Diokno said the average growth in the volume of total manufacturing production from January to August was 6.1, which was sharply lower than the 2010 average of 23.2. Growth rates for construction-related sectors were notably down, including wood and wood products; cement; glass and glass products; and basic metals and iron and steel.