THE country’s manufacturing output slowed to 15.2 percent in 2022 as bumps in the recovery from the pandemic put the brakes on expansion, according to the latest Production Index and Net Sales Index of the Philippine Statistics Authority (PSA).
PSA data showed the Volume of Production Index (VoPI) was slower than the 52.6-percent growth—numbers attributed to base effects —posted in 2021.
In December, the VoPI posted a growth of 4.8 percent, the 6th highest for the whole year of 2022, PSA told the BusinessMirror. The lowest VoPI was recorded in April 2022, a contraction of 1 percent.
“The continued growth in manufacturing, though slower year-on-year amid some normalization of denominator/base effects, may be largely attributed to the further reopening of the economy towards greater normalcy,” Rizal Commercial Banking Corporation (RCBC) Chief Economist Michael Ricafort said.
The slower annual growth of VoPI in December 2022 compared to its annual growth in November 2022 were mainly attributed to the slower growth in three industry divisions: transport equipment which contracted 1 percent from 14.3 percent in the previous month; manufacture of computer, electronic and optical products, a growth of 21.3 percent from 25.8 percent; and manufacture of basic metals, a deeper contraction of 37.5 percent from a decline of 29.2 percent in November 2022.
“In addition to these three, slowdowns were also observed in the annual growth rates of the indices of eight industry divisions,” the PSA said.
In contrast, the PSA said eight industry divisions posted higher annual growth rates in December 2022 than in November 2022, including the manufacture of food products.
Among these industry divisions, manufacture of fabricated metal products, except machinery and equipment posted the highest annual growth rate of 52.9 percent in December 2022.
“The VoPI for manufacture of food products, on the other hand, registered an annual increment of 7.2 percent in December 2022. This was higher compared with the November 2022 annual growth rate of 4.8 percent, but slower relative to December 2021 annual increase of 30.4 percent,” the PSA said.
Capacity utilization
Meanwhile, the average capacity utilization rate for the manufacturing sector in December 2022 was reported at 71.6 percent, slower than the 72.6 percent in the previous month. However, this was faster than the 67.5 percent posted in December 2021.
At least 19 out of 22 industry divisions had more than 60 percent average capacity utilization rate, led by manufacture of wearing apparel at 79.7 percent.
Other manufacturing divisions with higher capacity utilizations in December included the manufacture of machinery and equipment except electrical, at 79 percent; and manufacture of other non-metallic mineral products at 76.3 percent.
The Production Index and Net Sales Index was formerly called the Monthly Integrated Survey of Selected Industries (MISSI) report.
It continues to monitor the production, net sales, inventories, and capacity utilization of selected manufacturing establishments to provide flash indicators on the performance of the manufacturing sector.
Image credits: Nonie Reyes