THE lackluster performance of the country’s manufacturing sector continued in October, according to the latest Monthly Integrated Survey of Selected Industries (Missi) released by the Philippine Statistics Authority (PSA) on Friday.
Missi data showed that the average capacity utilization rate of the country remained below 70 percent in October 2020. This is the fourth consecutive month that average capacity utilization was below 70 percent.
Data showed the average capacity utilization was at 67.1 percent in July; 67.4 percent in August; and 69.2 percent in September.
“Based on responding establishments, the average capacity utilization rate for the manufacturing sector in October 2020 was posted at 67.2 percent from 69.2 percent in the previous month,” PSA said.
National Statistician Dennis S. Mapa earlier said that prior to July, the lowest average capacity utilization rate of the manufacturing sector was recorded 18 years ago in July and August of 2002 at 74.3 percent.
“Capacity Utilization Rate is the ratio of total output to the maximum rated capacity of the establishment. Rated Capacity refers to the largest volume of output possible at which the factory can operate with an acceptable degree of efficiency, taking into consideration unavoidable losses of productive time [i.e. vacation, holiday and repair of equipment] and availability of raw materials,” PSA explained.
PSA data also showed the country’s Volume of Production Index (VoPI) contracted 11.3 percent in October 2020. This contraction is deeper than the 8.6 percent in September 2020 and 5 percent in October 2019.
The deepest contractions in VoPI were recorded by petroleum products at 99.1 percent; printing, 53.4 percent; and tobacco products, 48.7 percent.
With this, the Value of Production Index (VaPI) for manufacturing also continued to contract and recorded a decline of 14.2 percent in October 2020, a deeper contraction compared to the 12.4 percent in the previous month.
PSA said the October 2020 figure was the eighth consecutive month that VaPI posted a negative growth rate. Furthermore, in October 2019, VaPI contracted by 5.8 percent annually.
Pushing down the VaPI in October 2020 were decreases in the indices of 15 industry groups. These were led by petroleum products which contracted 99.2 percent; printing, 52.8 percent; and footwear and wearing apparel, 49.2 percent.
Missi is a report that monitors the production, net sales, inventories, and capacity utilization of selected manufacturing establishments to provide flash indicators on the performance of the manufacturing sector.
Image credits: Nonie Reyes