June industrial output likely to match May pace — Moody’s

FACTORY output likely grew at a steady pace in June compared to May, although slower than the rate seen a year earlier, Moody’s Analytics said over the weekend.

The industrial sector’s output likely rose 5.8% from a year earlier. If this projection bears out, it would match the growth posted in May but would slow from a 9.8% increase tallied in June 2016.

A more upbeat global economy is bolstering industrial production, coupled with strong demand from Filipino consumers.

“The archipelago’s manufacturers are benefiting from stronger demand at home and abroad. Domestically, private investment and consumption are expanding rapidly as positive demographics and infrastructure improvements propel the economy towards GDP ( gross domestic product) growth around 7%,” the Moody’s unit said in a report released on Friday.

“External demand for Philippine goods, particularly electronics, is improving thanks to the synchronized upswing in global economic conditions.”

The Philippine Statistics Authority (PSA) will release off icial trade data on Thursday.

Factory output in May, as measured through the volume of production index, posted the fastest rise since the 12.3% posted in March, according to PSA data.

The production of fabricated metal products more than doubled from a year ago, followed by doubledigit expansions for other items such as leather products (44.3%), footwear and apparel (34.6%), furniture and fixtures (34.4%), and basic metals (29.1%), to name a few.

Average capacity utilization stood at 83.8% in May, with 11 of 20 major industries operating above capacity.

The Nikkei Philippines Purchasing Managers’ Index (PMI) had a reading of 53.9 in June, lower than May’s 54.3 though it signaled sustained expansion for the manufacturing sector. It was deemed a “solid performance” for the industry and kept the Philippines in the lead against its Southeast Asian neighbors.

The continued growth in factory output is expected to support robust GDP growth, IHS Markit analyst Bernard Aw said of the PMI figures.

The Philippine economy grew by 6.4% during the first quarter. Socioeconomic Planning Secretary Ernesto M. Pernia said second-quarter expansion is likely to come in faster, and could fall within the government’s 6.57.5% growth goal for the year. —