Manufacturing index down 48.6% in November
Tisco Securities' Research Centre has reported that the Manufacturing Production Index (MPI) for November, the peak month of the flood crisis, tumbled 48.6 per cent year on year, according to the Industrial Economics Office.
The figure deteriorated from the 30.1-per-cent plunge in the previous month and fell below its estimate of a 41.5-per-cent drop and market consensus of a 39.1-per-cent decline. The industrial capacity utilisation rate also marked a new low of 40.1 per cent.
Production in major industries saw a sharp contraction, with the notable exception of food and beverages, which was up 1.8 per cent year on year and 12.3 per cent month on month.
The industries showing a further deterioration in production last month due to flooding were automobiles, hard disk drives, integrated circuits and electrical appliances.
However, petroleum output picked up slightly as some refineries resumed operations.
“With the impact of floods peaking in November, we expect MPI in December to show an improvement, although the year-on-year growth rate should remain in negative territory,” the research centre said.
“This is because those factories that managed to resume production after flooding are only operating at partial capacity, while some refineries have been temporarily shut down for maintenance.”
Manufacturing output contributes 40 per cent of gross domestic product, so the worse-than-expected decline in industrial output will result in a deeper GDP contraction.
The MPI slumped 39.3 per cent year on year on average during the October-November period and is poised for a further drop in December.
Tisco has reduced its GDP growth forecast for this quarter from 1.7 per cent to a 6.0-per-cent contraction, and for the full year, to a 0.8-per-cent expansion from 1.9 per cent.
The low-base effect should support GDP growth next year. However, with the slow recovery in manufacturing and the gloomy global economic outlook as a result of the euro-zone debt crisis, Tisco has lowered its 2012 export-growth estimate to 7.0 per cent from 9.8 per cent.
However, it maintains its 2012 GDP growth forecast at 4.5 per cent and anticipates a strong rebound in domestic demand, aided by government policies aimed at stimulating the economy.
