Factory output regained ground in November 2023

MANILA, Philippines  -Local factory output inched up in November 2023 amid brisk production to meet the seasonal surge in demand during the holiday season.

A monthly survey of selected industries showed the Philippines’ Volume of Production Index (VoPI), a measure of manufacturing output, grew 1.9 percent year-on-year in November, the Philippine Statistics Authority (PSA) reported on Tuesday.

That marked a recovery after VoPI significantly slowed to 1.5 percent in October.

The results of PSA’s survey is consistent with the report of S&P Global, which showed the country’s Purchasing Managers’ Index (PMI)—another gauge of factory output—posted its best growth in 10 months in November after demand jumped to an eight-month high.

READ: Factory output hits 10-month high but job cuts continue

But manufacturers likely sailed in rough waters in the final month of 2023 if advance estimates by S&P Global were to be believed.

Data showed the country’s PMI growth weakened in December after export sales collapsed for the first time in three months, offsetting the strong demand at home.

Slowdown

As it is, a slowdown in factory output does not bode well for the government’s goal of powering up economic growth to between 6 to 7 percent in 2023.

READ: PH economy grew by 5.9% in Q3

With third quarter gross domestic product growth at 5.9 percent, the economy would have to expand by 7.2 percent to hit at least the low-end of the Marcos administration’s target range.

Dissecting the PSA’s report, the faster VoPI reading in November was due to the 17.1-percent annual growth in production of transport equipment, which cushioned the 11.6-percent decline in production of beverages and 2.4-percent contraction in manufacture of chemicals.

The average capacity utilization rate for the manufacturing industry in November was reported at 74.8 percent, from 74.3 percent in the previous month. INQ

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