By Mark T. Amoguis
MANUFACTURING output declined once more in October, extending its streak to eleven months, the government said Thursday.
Factory output, as measured by the volume of production index, declined by 3.7% year-on-year in October, according to preliminary results of the Philippine Statistics Authority’s Monthly Integrated Survey of Selected Industries (MISSI).
This was lower than September’s revised 3.6% contraction but a reversal from the 2.9% rise logged in October 2018.
Year to date, factory output declined 7.6%, against the year-earlier rise of 9.8%.
Factory output has been in negative territory since December 2018.
The Nikkei Philippines Manufacturing Purchasing Managers’ Index (PMI) improved that month to 52.1 from September’s 51.8 and October 2018’s 54.0, the strongest improvement in nine months, or since the 52.3 logged in January.
A PMI reading above 50 signals improvement in purchasing, which is a leading indicator for future manufacturing activity as factories order raw materials for processing. A score below 50 indicates deterioration.
The MISSI reported declines in nine out of 20 major industry groups in October. Of these, four were in double-digits: furniture and fixtures (-32.0%); miscellaneous manufactures (-23.0%); petroleum products (-17.5%), and electrical machinery (-17.3%).
Average capacity utilization was estimated at 84.5%. Twelve of the 20 sectors registered capacity utilization rates of at least 80%.
In a separate statement, the National Economic and Development Authority (NEDA) said that to sustain the implementation of construction-related activity and to spur the manufacturing sector’s growth, extending the validity of the current year’s budget as well as passing the 2020 national government budget are necessary.
“Despite manufacturing’s performance, the business and consumer outlook remain positive in anticipation of higher consumer spending during the holiday season, favorable macroeconomic conditions, and a likely recovery in government spending on infrastructure,” NEDA Undersecretary for Regional Development and Officer-in-Charge Adoracion M. Navarro was quoted as saying in the statement.