Manufacturing output stalls in JUNE–PSA data

THE average capacity utilization rate of factories rose to a two-year high in June 2022 but this did not translate into a bigger manufacturing during the period, according to the Philippine Statistics Authority (PSA).

Data from the latest Monthly Integrated Survey of Selected Industries (MISSI) showed that the average capacity utilization rate of factories was at 71.1 percent. PSA said this is the highest since February 2020.

However, the Volume of Production Index (VOPI) was at 2.4 percent in June 2022 and nowhere near the VOPIS 96.8 percent growth posted in February 2020.

“Average capacity utilization is the average of all firms in the sample. But sizes of firms vary [as well as] their Volume of Production,” National Statistician Claire Dennis S. Mapa told the Businessmirror on Tuesday. “[It’s] not necessarily a one-to-one link.”

Mapa said of the 162 who reported 90 to 100 percent operation, 27 or 16.7 percent are small firms; 31 or 19.1 percent are medium; and 104 or 64.2 percent are large establishments.

The MISSI data also stated that out of the 630 firms that responded to the survey, some 349 or more than half of the firms operated below 80 percent capacity in June.

The total firms being surveyed by the MISSI was placed at 949 but for June, only 630 responded. Mapa said, which translates to a 70 percent response rate.

“The proportion of establishments that operated at full capacity [90 percent to 100 percent] was 25.7 percent of the total number of responding establishments. Meanwhile, 34.8 percent operated at 70 to 89 percent capacity, while 39.5 percent operated below 70 percent capacity,” the PSA said.

Meanwhile, the performance of the VOPI was driven by 13 industry divisions that posted the highest production in June 2022.

The sector that posted the fastest growth was reported in manufacture of machinery and equipment except electrical at 45.3 percent. On the contrary, nine industry divisions recorded decreases with printing and reproduction of recorded media registering the steepest contraction of 25.1 percent.

The data also showed the Value of Production Index (VAPI) maintained its upward trend with a year-on-year increment of 9.8 percent in June 2022, from an annual growth rate of 8 percent in the previous month. In June 2021, the VAPI accelerated with an annual rate of 440.5 percent.

Based on the National Income Accounts (NIA), the manufacturing sector posted a growth of only 2.1 percent in the second quarter, the lowest since the first quarter of 2021.

With a growth of 8.3 percent in the first quarter this year, the average growth of the manufacturing sector was at 5.9 percent in the first semester of the year.

This is slower than the 10.5 percent posted in the first semester last year and the 7.5 percent recorded in the second semester of 2021.