The manufacturing sector grew 5.9 percent in November from a year ago, faster than the 5.3-percent expansion in October, the Philippine Statistics Authority said Friday.
The November growth, however, was slower than the 28.6-percent increase in the volume of production index registered in the same month in 2021 mainly on baseline impact.
Preliminary results of the monthly integrated survey of selected industries showed the value of production index also grew 12.7 percent in November, slower than 13 percent in October and 30 percent a year ago.
“The slowdown may have to do with higher prices/inflation that partly weighed on demand, higher interest rates/borrowing costs that weighed on new investments/expansion plans and sales,” Rizal Commercial Banking Corp. chief economist Michael Ricafort told Manila Standard.
Inflation settled at 8.0 percent in November and rose further to 8.1 percent in December, data showed.
Ricafort also said the relatively weaker peso added to importation costs.
“This may also have to do with the normalization of the base effects, after coming from much lower base in earlier months amid pockets of lockdowns earlier in 2021 [that magnified that year-on-year manufacturing growth earlier in 2022],” Ricafort said.
The PSA said of the 22 industry divisions, 15 reported positive annual growth rates in terms of volume of production, led by manufacture of machinery and equipment except electrical with 68.5 percent annual growth rate.
Seven industry divisions posted annual decreases with manufacture of electrical equipment exhibiting the fastest annual drop of -54.5 percent.
The value of net sales index maintained a double-digit annual growth rate of 19.7 percent in November, although at a slower rate than 29.4 percent in October. The volume of net sales index also posted an annual growth, but a slower rate of 12.5 percent in November compared to 20.6 percent in October.
The average capacity utilization rate for the manufacturing sector improved to 72.5 percent in November from 72.4 percent in October.
The proportion of establishments that operated at full capacity (90 percent to 100 percent) was 18.7 percent of the total number of responding establishments in November.
About 44.6 percent operated at 70 to 89 percent capacity, while 36.7 percent operated below 70-percent capacity.