Inclement weather dampens local factory output
Manufacturing output returned to contraction mode in November, as production took a hit from supply problems caused by strong typhoons that hit the country late last year.
A monthly survey of selected industries showed that the volume of production index (VoPI), a measure of factory output, had declined by 4.2 percent year-on-year in November, the Philippine Statistics Authority (PSA) reported on Tuesday.
That was a reversal from the 0.7-percent growth in October. In the first 11 months of 2024, the growth of VoPI averaged 1.1 percent.
Of the 12 industries surveyed by the PSA, 10 posted negative growth rates in November.
And despite the typical surge in demand a few weeks before the holiday season, the PSA said manufacture of food (-0.8 percent), transport equipment (-0.4 percent) and computer products (-5.6 percent) were the main contributors to the drop in the overall output.
Specifically, state statisticians explained that the decline in VoPI for food products was due to lower volume of finished bakery goods, sugar and condiments.
John Paolo Rivera, senior research fellow at Philippine Institute for Development Studies, said local producers likely faced supply problems following the onslaught of powerful storms late last year.
“The decline in VoPI in November 2024 indicates a contraction in factory output, which may be attributed to several factors such as weaker demand for certain manufactured goods, higher production costs due to inflationary pressures and lingering supply chain disruptions,” Rivera said.
“It is also possible that some industries scaled back production due to uncertainties in both domestic and global economic conditions,” he added.
As it is, the results of the PSA’s survey was a stark contrast to the report of S&P Global, which had reported that the Purchasing Managers’ Index (PMI), a gauge of manufacturing performance, stayed on expansion mode in November to post its best reading in 29 months.
“This divergence suggests that while manufacturers are optimistic about future growth (as seen in the PMI), actual output in November 2024 faced temporary setbacks, potentially influenced by external shocks or sector-specific trends,” Rivera explained.
