Growth in manufacturing output nearly flat

The manufacturing sector barely improved production in May 2011 compared with that of the same month last year.

Economists said the figures indicated sluggishness in the economy.

Still, the National Statistics Office (NSO) reported Tuesday that the manufacturing sector performed better on a month-on-month basis.

According to the NSO, the volume of manufacturing output for May 2011 grew 0.9 percent on an annual basis.

Year-on-year growth was much better in April 2011 at 2.2 percent. The NSO said this could be due to lower production of paper and paper products and non-metallic mineral products, even as it noted expansion in furniture and fixtures, beverages, miscellaneous manufactures, chemical products, rubber and plastic products, and publishing and printing.

On a monthly basis, factory output improved by 4.3 percent in May 2011 from that of April.

The NSO attributed the month-on-month growth to an increase in production of furniture and fixtures, tobacco products, petroleum products, beverages, and paper and paper products.

“For factory output, I expected year-on-year growth to be slower, but month-on-month growth to be faster, due to production of summer and school-related manufactured goods,” economist Cid L. Terosa of the University of Asia and the Pacific said in a text message.

Still, the May 2011 numbers reflect a “sluggish economy,” said Gilbert Llanto, an economist with the state-run think tank Philippine Institute for Development Studies.

“Manufacturing has to pick up, and that’s a big challenge to policy makers,” Llanto said.

On average, manufacturers produced at 83.2 percent capacity in May 2011, according to the National Statistics Office.

The agency reported that 11 of the 20 major sectors registered capacity utilization rates of 80 percent and more. These were basic metals, petroleum products, food manufacturing, non-metallic mineral products, electrical machinery, paper and paper products, chemical products, miscellaneous manufactures, rubber and plastic products, machinery except electrical and textiles.

About 17.2 percent of establishments operated at full capacity (90 to 100 percent) in May 2011, the NSO added.

The statistics agency also said that 60.2 percent of establishments operated at 70 to 89 percent capacity, while 22.6 percent of all establishments operated below 70 percent.