Factory output bounced back in April, buoyed by higher food manufacturing production, from a contraction in the previous month, the Philippine Statistics Authority (PSA) reported on Friday.
Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries (MISSI) showed factory output, as measured by the Volume of Production Index (VoPI), grew by 6.7 percent year-on-year in April.
This was a reversal from the 5.8-percent decline in March, but was slower than the 8-percent growth recorded in April last year.
Nevertheless, April’s print was the fastest growth in seven months since the 9.5-percent surge seen in September 2023.
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Michael Ricafort, chief economist at Rizal Commercial Banking Corp., said good weather conditions during the month supported the increase in food manufacturing output, as agricultural production and supply went up.
“Seasonal increase in demand for food was also seen in April after the holidays with more vacations and festivities as also facilitated by better weather during the summer season,” Ricafort said.
Primary contributors
The manufacture of food products expanded by 6.8 percent in April, a reversal from the 13.2 percent decline in the previous month, resulting in the overall growth in VoPI.
Other primary contributors to the growth were the manufacture of transport equipment at 5.1 percent in April, a reversal from the 12-percent contraction in the previous month.
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Manufacturing of fabricated metal products, except machinery and equipment also rose by 32.3 percent from a 3.1-percent drop in March.
Of the 19 industries monitored by the PSA, 12 sectors noted increases, led by the manufacture of wood, bamboo, cane, rattan articles, and related products at 11.2 percent.
To compare, S&P Global Philippines Manufacturing Purchasing Managers’ Index (PMI) inched down to 51.9 in April from 52.2 in March, of which a reading above 50 marks improvement for the manufacturing sector while anything below indicates deterioration.
Robust growth
According to S&P Global, demand from external markets showed robust growth as export orders increased for a fourth straight month, mainly due to improved demand trends in key export markets and new client wins.
Growth in overall sales was maintained in May despite easing fractionally in the previous month.
With the rising demand, the report said that many companies are eyeing to build their inventories to match the continued output growth.
Meanwhile, its average capacity utilization, or the extent to which industry resources are used in manufacturing, averaged 75.2 percent in April, slightly lower than 75.3 percent in the previous month.
All 22 sectors showed an average capacity utilization rate of at least 60 percent for the month.