Manufacturing output drops for 3rd straight month in March

The country’s manufacturing output shrank for the third straight month in March, providing a further sign that the overall economy performed weakly in the first three months of 2001.

The National Statistics Office (NSO), through its Monthly Integrated Survey of Selected Industries (MISSI), reported yesterday that the volume of production in the manufacturing sector contracted by two percent in March after declining by 3.7 percent and 1.9 percent in February and January, respectively.

Analysts said the contraction in manufacturing output for the three-month period indicates the economy is likely to remain sluggish this year.

Government economists had hoped that economic growth will be supported by a strong recovery in the manufacturing, which was hobbled last year by a spate of negative political developments and a slowdown in global economy.

The government statistics office said the drop in the overall performance of the manufacturing sector was due largely to the sharp drop in production of 10 out of 16 industries such as transport equipment, chemicals, wood and wood products, wearing apparel, rubber products, and furniture and fixtures.

In particular, transport equipment incurred the biggest fall of 28 percent as a result of production setbacks experienced since October 2000.

Other sectors with double-digit drop in production were: chemicals, down 11 percent; wood and wood products, 28.8 percent; wearing apparel, 13.4 percent; rubber products, 20.7 percent; and furniture and fixture, 38 percent.

Analysts said the higher cost of raw materials, plant closures because of labor disputes and temporary shutdown of machinery all contributed to the dismal performance of these sectors.

On the other hand, other sectors which recorded double-digit increases in production volume were: petroleum refineries, food manufacturing, beverage and other manufacturing industries.

Overall, the average capacity utilization rate, or the ratio of output to the maximum rated capacity of manufacturing plants, was estimated at 78.4 percent, down from the 81.7 percent recorded in the same period last year.

Of the 16 sectors, 11 posted more than 80 percent capacity utilization rates with petroleum refineries recording the highest capacity utilization rate of 84.6 percent.