THE country’s manufacturing output continued to decline and posted a contraction of 0.2 percent in June, according to the monthly integrated survey of selected industries (MISSI) released by the National Statistics Office (NSO) on Thursday.
The NSO said the country’s Volume of Production Index (VoPI) in June declined from the previous month’s growth of 1.9 percent. The VoPI also contracted by 2 percent on a month-on-month basis compared to a growth of 5.6 percent in May.
“The decline was not only sharp: It was an accelerating fall. The other sectors that are contracting are food manufactures, tobacco [shrinking since last year], wood and wood products, basic metals, nonferrous metals, and electrical machinery,” former Budget Secretary Benjamin Diokno said.
Diokno said the 0.2 percent contraction in manufacturing output was a disappointment, considering that manufacturing was the major growth driver last year. He pointed out that from a peak of 36.2 percent in January 2010, the index started to slow since December last year.
Before the contraction in June, the indices for the first five months of the year were all in positive territory. Diokno noted that in January, the VoPI was at 13.3 percent; February, 10.2 percent; March, 9 percent; April, 1.8 percent; and May, 1.9 percent.
Further, the indices for machinery, except under those under the electrical category, also plunged from a peak of 86.9 percent in May 2010 to a contraction of 19.7 percent in January 2011. The contractions continued to 23.3 percent in February; 30.6 percent in March; 42.8 percent in April; 47.6 percent in May; and 51.4 percent in June.
“Sharp reduction in output are accounted for by miscellaneous manufactures, petroleum products and machinery except electrical,” Diokno added.
The Value of Production Index (VaPI) for the manufacturing industry slowed to 2.7 percent in June 2011.
The NSO said this was due to the slowdown in production values of the miscellaneous manufactures and chemical products.
However, sectors that helped prevent the VaPI from contracting were the significant increases in value of production in furniture and fixtures, petroleum products, rubber and plastic products, beverages, paper and paper products, tobacco products and fabricated metal products.
On a monthly basis, VaPI posted a decline of 0.2 percent in June 2011, from a 4-percent growth in May 2011. The two major sectors that influenced the decrease in production values were miscellaneous manufactures and petroleum products, registering a decline of 22.8 percent and 12.5 percent, respectively.
Meanwhile, the NSO said the average capacity utilization in June 2011 for total manufacturing stood at 83.2 percent. This was largely due to 11 of the 20 major sectors registered capacity utilization rates of 80 percent and more.
These sectors were basic metals, petroleum products, food manufacturing, nonmetallic mineral products, electrical machinery, paper and paper products, chemical products, rubber and plastic products, miscellaneous manufactures, machinery except electrical and textiles.
“The proportion of establishments that operated at full capacity—90 percent to 100 percent—was 16.8 percent in June 2011. About 60.3 percent of the establishments operated at 70 percent to 89 percent capacity, while 22.9 percent of the establishments operated below 70 percent capacity,” the NSO said.
On the other hand, Volume of Net Sales Index (VoNSI), on a year-on-year basis, registered a growth of 3.5 percent in June 2011. This is explained by the expansion in sales output observed in furniture and fixtures, with a 92.5-percent growth.
The NSO said major sectors that posted double-digit increases were food manufacturing, miscellaneous manufactures, chemical products, publishing and printing and rubber and plastic products.
On the other hand, on a month-on-month basis, VoNSI slid 0.8 percent or less than 1 percent in June 2011. This was due to the significant decreases observed in seven major sectors, offsetting the increases reported by 12 industry groups.
