Factory output down 2.8% in Jan

Factory output, as measured by the volume of production index (VoPI), tumbled by 2.8 percent in January due to rising production costs.

The National Statistics Office (NSO) reported yesterday the drop in January was sharper than the revised 0.1 percent decline recorded in December last year due to the double-digit decreases reported by six major sectors.

Analysts said the lower output in January was due mainly to pressures arising from higher production costs.

"The increase in production value despite the drop in production volume is primarily inflation related," they said.

Sectors that reported double-digit drop in production volume were electrical machinery, footwear and wearing apparel, machinery excluding electrical, non-metallic mineral products, wood and wood products, paper and paper products and publishing and printing.

Factory output based on the value of production index (VaPI) went up by 16.1 percent as 12 out of 20 major sectors reported double-digit growth rates in production costs.

The 12 industries that reported increases in output values were furniture and fixtures, food manufacturing, petroluem products, leather products, fabricated metal products, transport equipment, textiles, beverages, rubber products, basic metals, publishing and printing and tobacco.

However, VaPI on a monthly comparison declined by 7.6 percent in January 2006. This was brought about by the significant decreases noted in the following sectors: fabricated metal products, petrolem products, footwear and wearing apparel, non-metallic mineral products and furniture and fixtures.

Factories operated at an average of 80.2 percent capacity in January.

"The proportion of establishments that operated at full capacity (90 percent to 100 percent) was 10.8 percent in January 2006. More than half or 56.6 percent of the establishment operated at 70 percent to 89 percent capacity and 32.6 percent establishments operated below 70 percent capacity," the NSO said.

Results of the January survey were based on the response of 440 sample establishments. Response rate was 88.7 percent.