Growth of PH factory output value slowed in Nov

The growth of factory output value in the Philippines slowed down to 12.7 percent in November 2022 from 13 percent in October amid a sharp drop in the production of electrical equipment.

Still, preliminary data from the Philippine Statistics Authority (PSA) also show that output volume grew faster at 5.9 percent in November from 5.3 percent a month earlier.

Results from the PSA’s latest monthly integrated survey of selected industries show that last November, 17 out of the 22 industries covered saw increases in output value.

The biggest gainer in value was the nonelectrical machinery sector with a 68-percent growth while the biggest loser were the makers of furniture, which saw a 40-percent drop.

Also, 15 industries saw increased output volume, with manufacturers of nonelectrical machinery and equipment performing best with a 68-percent growth while makers of electrical equipment produced 54-percent less.

Output of food products alone increased in value by 7.6 percent but the volume decreased by 0.4 percent.

Utilization rates

Among the 22 manufacturing industries covered, the paper and paper products sector was the only one that had a capacity utilization rate of less than 60 percent.

The busiest were makers of computer, electronic and optical products that were operating at 81 percent of capacity, and nonelectrical machinery and equipment at 80 percent.

The PSA said one-fifth of the 563 businesses that took part in the survey in November were operating at “full capacity”— which means at least 90 percent capacity utilization rate.

Also, 19 percent of respondents were operating at 70 percent to 89 percent capacity, while 45 percent operated below 70 percent capacity.

In November, the S&P Global Philippine Manufacturing PMI (purchasing managers index) grew for the 10th month in a row and improved to 52.7, farther up the neutral “50” compared with 52.6 in July.

Maryam Baluch, economist at S&P Global Market Intelligence, said such a readout stemmed from greater demand that drove higher sales and output.

“While the manufacturing sector has shown strong gains during 2022, elevated price pressures pose an ongoing threat,” Baluch said, adding that this was exacerbated by supply chain issues and rising interest rates.

“As the manufacturing sector has heavily relied on demand to help boost growth, the rise in rates, with the prospect of further potential monetary tightening, could impact customer spending,” she said.