Factory output declines in May

Manufacturing output posted its sixth consecutive month of decline in May albeit at a slower pace, the government reported this morning.

Preliminary results of the Philippine Statistics Authority’s (PSA) latest Monthly Integrated Survey of Selected Industries, showed factory output — as measured by the Volume of Production index — contracting by 4% year on year in May versus the revised 14.3% decline in April and the 13% growth in May 2018.

Year to date, factory output decline averaged 7.6% compared to the 14.2% growth average in 2018’s comparable five months.

“Six major industry groups registered annual decreases with furniture and fixtures and food manufacturing posting the highest annual declines of 35% and 14%, respectively,” the PSA said in a statement.

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) increased that month to 51.2 from April’s 50.9, but slower than last year’s 53.7.

A reading above 50 signals improvement in business conditions from the preceding month, while a score below that point indicates deterioration.

Average capacity utilization — the extent by which industry resources are used in the production of goods — was estimated at 84.4%. Eleven of the 20 sectors registered capacity utilization rates of at least 80%. – Mark T. Amoguis