Factory output declines in June

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Manufacturing output extended its declining streak to seven months in June, 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 10.5% year on year in June versus the revised 9.9% decline in May and the 9.8% growth in June 2018.

For the first half, factory output decline averaged 9.6% compared to the 13.5% growth average in the first half of 2018.

The PSA attributed the downtrend to the annual decreases seen in 11 major industry groups led by double-digit contractions in petroleum products (-69.3%), furniture and fixtures (-40.5%), and basic metals (-18.3%).

In comparison, the Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) increased that month to 51.3 from May’s 51.2, but slower than last year’s 52.9.

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 84.3%. Eleven of the 20 sectors registered capacity utilization rates of at least 80%. — Lourdes O. Pilar