Phl mfg output likely cools in Nov – Moody’s Analytics

MANILA, Philippines - Philippine manufacturing output growth in November likely weakened from the previous month on softer consumer demand and food supply shocks, Moody’s Analytics said.

The firm has forecast factory output, as measured by the volume of production index, to have expanded 7.2 percent in November, slower than the 7.5-percent growth in October.

“Industrial production likely cooled a little in November from October’s 7.5 percent year-on-year expansion,” Moody’s said.

“Consumer demand has cooled in the second half of the year, dampening food manufacturing. Bad weather associated with typhoon season will affect food supplies and food production through December,” the firm added.

Official November manufacturing output data will be released on Friday.

Factory output showed double-digit growth figures in the second half of 2013 but slid to single digit during the first quarter of the year. Despite breaching 10 percent each month during the second quarter, expansion fell below that level starting July.

“Improved global tech demand will lift electronics production in 2015,” Moody’s said.

Government data showed the rise in the production in October last year was driven by increases in the printing, fabricated metal products, beverages, paper and paper products, and the non-metallic mineral products.

During the month, the value of production index also climbed an annual 7.2 percent on higher earnings on printing, fabricated metal products, beverages, paper and paper products, non-metallic mineral products, and food manufacturing.

The government is banking on the manufacturing sector to boost the domestic economy. In the third quarter of last year, the sector contributed most to the country’s gross domestic product despite a decelerated in the gross value added to 7.2 percent from the previous year’s 8.9 percent.

The Philippine economy grew by a lower-than-expected 5.3 percent in the third quarter, bringing nine-month growth to 5.8 percent. The latest figure is way below the government’s goal of a 6.5 to 7.5 percent growth in 2014.

The government hopes to grow the economy by seven to eight percent this year.