PH manufacturing logs 13th month of decline with over 70% drop in March

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The Philippine manufacturing sector shrank for the 13th straight month in March 2021, posting a 70% contraction. Image by Janno Nivergall from Pixabay
  • The Philippine manufacturing sector posted more than 70% contractions in both volume and value for March 2021, the 13th straight month of decline
  • The Volume of Production Index dropped 73.4% while the Value of Production Index likewise declined 74.2% in March 2021
  • Manufacture of coke and refined petroleum products saw the largest decrease while manufacture of fabricated metal products, except machinery and equipment recorded the biggest increase
  • The average capacity utilization rate for manufacturing in March 2021 rose slightly to 61% from 60.4% in the previous month

The Philippine manufacturing sector posted more than 70% contractions in both volume and value for March 2021, the 13th straight month of decline, according to data from the Philippine Statistics Authority (PSA).

The Volume of Production Index (VoPI) dropped 73.4% in March 2021, faster than the 43.3% decrease registered in February 2021 and 20.4% in March 2020, according to PSA’s latest Monthly Integrated Survey of Selected Industries.

The drop in VoPI was brought about by contractions in the indices of five industry divisions. Among these, the top contributor was manufacture of coke and refined petroleum products with an annual rate of -97.4%.

Meanwhile, among industry divisions that rose during the period, the fastest growth was recorded in manufacture of fabricated metal products, except machinery and equipment at 85%.

The Value of Production Index (VaPI) likewise declined 74.2% in March 2021, faster than the reported downturn in February 2021 of 46.4% and in March 2020 of 25.1%. The March 2021 contraction was also the fastest decline since September 2020.

Of the 22 industry divisions, VaPI dropped in five industry divisions. Manufacture of coke and refined petroleum products also had the largest decrease during the period at 97.3%. On the other hand, 17 industry divisions showed increases during the period with manufacture of fabricated metal products, except machinery and equipment recording the highest annual growth of 84.9%.

Based on responding establishments, the average capacity utilization rate for the manufacturing sector in March 2021 slightly rose to 61% from 60.4% in the previous month.

Of the 22 industry divisions, 17 had at least 50% average capacity utilization rate, which was led by manufacture of furniture (80.0%), other manufacturing and repair and installation of machinery and equipment (73.5%), and manufacture of electrical equipment (72.5%).

About one-fifth of responding establishments operated at full capacity.

The proportion of establishments that operated at full capacity (90% to 100%) was about one-fifth (18.8%) of the total number of responding establishments. Meanwhile, 35.4% operated at 70% to 89% capacity, while 45.8% operated below 70% capacity.