• Manufacturing Output Improves

After losing steam since December 1999, manufacturing output perked up in May 2000 as its value of production index (VaPI) increased by 20.6 percent and its volume of production index (VoPI) by 12.3 percent according to the preliminary results of the Monthly Integrated Survey of Selected Industries (MISSI).

Export demand for electrical machinery and furniture and fixtures along with local demand for paper and paper products brought the May index up to 156.8 which was well within the range of the March 2000 index of 156.6 and the August 1999 index of 157.7.

This growth was posted even with the dips in the performance of food, textiles, and construction-materials manufactures.

• Net Sales Still Up

Net sales moved up in May 2000 with both value and volume growing by 34.2 percent and 22.5 percent, respectively. Value has been posting growths since June 1999 and volume since September 1999, although both series have shown 3 to 4 month swings of high-low-high during the past 12 months.

Production has also swung from high to low to high but over a 6-month period. Manufacturers appeared to have been producing to stock up and to allow this to run down before going through another inventory build-up.

Top gainer in terms of value and volume of net sales was electrical machinery which rose by 128.2 percent and 114.4 percent, respectively. Decliners were wood and wood products, which lost 21.5 percent in its value of net sales and textile, by 29.2 percent in its volume of net sales.

• Capacity Utilization at 79.7%

Average capacity utilization for May 2000 for manufacturing was estimated at 79.7 percent, up by 1.7 percentage points over the 78.0 percent a year ago. Eight out of 16 sectors improved on its use of capacity as compared to the same month last year. Petroleum refineries had the highest capacity utilization rate while food manufacturing posted the lowest capacity utilization rate.

Value of Production

In May 2000, the value of production index (VaPI) of 588.8 increased by 20.6 percent from 488.3 in May 1999. Year-on year increases were observed in 9 out of 16 major sectors led by furniture & fixtures which increased by 132.9 percent (See Annex 1-A). Other sectors contributing to the growth of value of production were electrical machinery (55.6%), petroleum refineries (42.7%), other manufacturing (32.3%), paper & paper products (30.9%), tobacco (28.9%), transport equipment (15.3%), rubber products (9.4%) and non-metallic mineral products (1.4%).

On the other hand, sectors that declined in their value of production were textile (-27.1%), food manufacturing (-21.3%), wood & wood products (-15.1%), basic metals (-10.5%), chemicals (-9.3%), wearing apparel (-6.0%) and beverage (-5.5%).

Volume of Production

The volume of production index (VoPI) for total manufacturing increased by 12.3 percent to 156.8 from 139.6 of the same month last year. Eight out of 16 sectors posted year-on-year increases led by furniture & fixtures with 132.9 percent increase. (See Annex 1-B). Other sectors which contributed to the positive performance were other manufacturing (48.3%), electrical machinery (46.2%), tobacco (30.2%), paper & paper products (26.5%), rubber products (11.8%), transport equipment (10.0%) and petroleum refineries (0.9%). The increases in the production output of these sectors can be attributed to the increased demand for these products from both domestic and export markets.

On the other hand, sectors which exhibited declines were textile (-41.8%), food manufacturing (-17.6%), basic metals (-16.2%), wood & wood products (-15.1%), chemicals (-13.0%), wearing apparel (-8.4%), beverage (-7.5%) and non-metallic minerals (-7.0%). The slowdown in the production in these sectors can be attributed to temporary or partial shutdowns in the operation of some establishments due to some labor disputes as well as decreases in the demand for these products.

Value of Net Sales

The value of net sales for May 2000 increased by 34.2 percent compared to the same month last year. Twelve out of 16 major sectors showed improvements in their value of net sales. Leading sector was electrical machinery registering 128.2 percent growth over the same month last year (See Annex 2-A). Other sectors that posted double-digit increases were furniture & fixtures (60.0%), petroleum products (53.8%), transport equipment (49.2%), basic metals (45.7%), wearing apparel (39.2%), paper & paper products (23.4%), non-metallic mineral products (23.2%), beverage (14.6%) and tobacco (13.8%).

On the other hand, sectors with lower value indexes of net sales as compared to the same month last year were wood & wood products (-21.5%), textile (-11.4%), rubber products (-4.1%) and miscellaneous manufactures (-1.0%).

Volume of Net Sales

The volume of net sales for April 2000 increased by 22.5 percent over the same month last year. Increases were observed in 13 out of 16 sectors led by electrical machinery which increased by 114.4 percent (See Annex 2-B). Other sectors that exhibited double-digit increases were furniture & fixtures (60.0%), basic metals (43.7%), transport equipment (42.3%), wearing apparel (35.7%), non-metallic mineral products (24.1%), paper & paper products (19.2%), tobacco (14.9%), beverage (12.2%) and miscellaneous manufactures (11.0%).

On the other hand, decreases were observed in the following sectors: textile (-29.2%), wood & wood products (-21.5%) and rubber products (-2.0%).

Capacity Utilization

The proportion of responding establishments that operated at full capacity (90%-100%) in May 2000 has improved from 17.1percent of the same month last year to 24.1 percent (See Annex 3-A). However there were also establishments which reduced use of capacity as about 40.1 percent operated below 70 percent capacity and this was higher by 2.5 percentage points over 37.6 percent a year ago.

The May 2000 average capacity utilization rate for manufacturing was estimated at 79.7 percent, higher than the 78.0 percent posted last year (See Annex 3B). Of the 16 sectors, eight sectors posted higher capacity utilization rates as compared to a year ago. Leading sector was petroleum refineries which recorded an average capacity utilization rate of 93.1 percent. Other sectors which registered more than 80 percent capacity utilization rates were electrical machinery (91.8%), furniture & fixtures (88.4%), miscellaneous manufactures (86.7%), rubber products (86.4%), tobacco (85.6%), and paper & paper products (82.8%).

Response Rate

These results were based on the response of 354 sample establishments, which comprised 68.2 percent of the total number of establishments covered by the survey.

Source: National Statistics Office
Manila, Philippines