FACTORY OUTPUT declined for the second straight month in April, marking the steepest fall in almost two decades, the Philippine Statistics Authority (PSA) reported earlier this morning.

Preliminary results of the PSA’s latest Monthly Integrated Survey of Selected Industries showed factory output, as measured by the Volume of Production Index (VoPI), contracting by 59.8% year-on-year in April

This was faster than the declines in March and April 2019, which were recorded at minus 7.7% and 14%, respectively.

According to the PSA, the April reading was the sector’s worst performance since 2001.

Year to date, the decline in factory output averaged 15.8% compared to the 9.1% growth decline in 2019’s comparable four months.

“The downturn in VoPI was driven by significant decreases in indices of all industry groups, of which, three were in a very minimal operations, namely: leather products (-99%), footwear and wearing apparel (-97.8%), and furniture and fixtures (-91.7%),” the PSA said in a statement.

A similar trend was observed in factory output as measured by the Value of Production index, which plunged by 61.4%.

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index, which uses a different set of variables, dropped to 31.6 from 39.7 in March. A reading above 50 indicates an improvement in business conditions from the preceding month.

Average capacity utilization — the extent by which industry resources are used in the production of goods — was estimated at 70%. Only four of the 20 sectors registered capacity utilization rates of at least 80%. – Jobo E. Hernandez

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