Factory output growth markedly slower in 2024

MANUFACTURING output rebounded in December from a month earlier, the Philippine Statistics Authority (PSA) reported on Friday, but overall 2024 growth — while positive — was substantially lower than in the previous two years.

The Value of Production Index (VaPI) expanded by 0.4 percent, recovering from November’s 3.5-percent contraction, and the Volume of Production Index (VoPI) also grew by 0.2 percent after falling by 3.9 percent.

A year earlier, both VaPI and VoPI growth were substantially higher at 3.7 percent and 3.0 percent, respectively.

The year-end results brought 2024 VaPI growth to 0.2 percent and VoPI growth to a slightly higher 0.9 percent. Both, again, were well below 2023’s 6.3 percent for VaPI and 4.9 percent for VoPI, and 2022’s 22.5 percent and 15.1 percent.

December’s VaPI rebound, the agency said, was largely driven by a significant recovery in the manufacture of computer, electronic and optical products, which saw growth of 8.6 percent after declining by 2.5 percent in November.

This sector, which had the second-highest weight in the computation of the production indicator, was said to have “contributed 35.2 percent to the trend of VaPI for the manufacturing section in December 2024.”

Other key contributors included the manufacture of coke and refined petroleum products, which grew by 5.2 percent after an 11.7-percent decline, and the manufacture of transport equipment that expanded by a stronger 7.2 percent from 1.9 percent.

Of the 19 remaining industry divisions, 13 posted growth while six contracted. The most significant decline was in the manufacture of basic metals, which fell by 18.2 percent.

The same industry divisions that bolstered VaPI also contributed to the VoPI growth: the manufacture of computer, electronic and optical products grew 4.3 percent from -5.8 percent; coke and refined petroleum, up 4.4 percent from -11.6 percent; and transport equipment, 6.1 percent from -0.2 percent.

Of the 19 remaining industry divisions, 13 again recorded annual growth in December, while the other six declined.

In terms of capacity utilization, the manufacturing sector operated at an average of 75.5 percent in December, slightly lower than 75.7 percent a month earlier, but higher than the 74.6 percent recorded a year ago.

“All industry divisions reported capacity utilization rates of more than 60.0 percent during the month,” the PSA said.

The top three were the manufacture of textiles (81.4 percent), manufacture of machinery and equipment except electrical (81.1 percent), and manufacture of other nonmetallic mineral products (80.7 percent).

Nearly a third, 181 or 31.4 percent, of the 576 establishments that participated in the PSA survey said they operated at full capacity, defined as 90 to 100 percent.

Meanwhile, 40.8 percent (235 firms) said they operated at 70- to 89-percent capacity and 27.8 percent (160 firms) operated below 70 percent.