MANILA, Philippines — Native manufacturing unit output progress eased in 2024, with the sector unable to squeeze out a stable growth in the course of the vacation season as producers grappled with provide issues and subdued demand at dwelling and overseas.
A month-to-month survey of chosen industries confirmed manufacturing output, as measured by the quantity of manufacturing index (VoPI), grew by 0.9 p.c year-on-year in 2024, easing from the 4.9-percent growth in 2023, the Philippine Statistics Authority (PSA) reported on Friday.
READ: Inclement climate dampens native manufacturing unit output
In December, when demand often spikes resulting in elevated manufacturing, manufacturing unit output grew by a measly 0.2 p.c.
It was nonetheless a reversal from the three.9-percent contraction in November.
Given the modest output progress, knowledge confirmed factories solely utilized 75.5 p.c of their capability on common, barely decrease than the 75.7-percent utilization fee within the earlier month.
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John Paolo Rivera, senior analysis fellow at Philippine Institute for Growth Research (PIDS), a state-run suppose tank, mentioned the assist from the vacation season was not as robust as anticipated.
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Meals manufacturing
“The numerous slowdown in VoPI displays persistent challenges within the native manufacturing sector, together with weak exterior demand, excessive borrowing prices and lingering provide chain constraints,” Rivera mentioned.
“The worldwide financial slowdown, significantly in main export markets like China and the US, could have weighed on the export-oriented manufacturing subsectors,” he added.
Information confirmed the VoPI for completed meals merchandise that got here out of factories contracted at a quicker fee of 1.7 p.c in December in comparison with the 0.9-percent decline in November.
What pulled down meals manufacturing within the remaining month of 2024 was the stoop in processing and preserving of vegatables and fruits following the onslaught of typhoons late final 12 months that created provide woes. Manufacture of dairy merchandise and animal feeds additionally took a success.
As it’s, meals was one of many six industries that had posted adverse output progress in December, with manufacturing of primary metals (-19.4 p.c) and tobacco merchandise (-18 p.c) registering the biggest declines.
It was the 16 different sectors that had posted constructive progress that introduced the general VoPI again to the constructive territory, figures confirmed. The gainers have been led by producers of digital merchandise (+4.3 p.c), coke and refined petroleum merchandise (+4.4 p.c) and transport tools (+6.1 p.c).
Transferring ahead, Rivera of PIDS believed that the continued rate-cutting cycle of the Bangko Sentral ng Pilipinas (BSP) would maintain manufacturing unit machines buzzing this 12 months.
“If the BSP begins slicing rates of interest, borrowing prices for companies may ease, supporting capital funding and manufacturing progress,” he mentioned.
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“General, the manufacturing sector is anticipated to get well reasonably in 2025, however sustained enchancment will depend upon rate of interest cuts, world commerce situations and home demand progress,” he added.