Fixed Capital Formation suffers decline in Durable Equipment

For the fourth quarter of 2005, investments in Fixed Capital Formation slipped to 1.4 percent from last year’s growth of 4.3 percent, as a result of the substantial decline in Durable Equipment.

Investments in Construction surge

In the fourth quarter, Construction accelerated to 4.9 percent from 3.3 percent largely due to the hike in the national government’s capital expenditures effecting an 18.7 percent increase in public construction from 1.5 percent in the previous year. On the other hand, investments in private construction shrank by 2.7 percent from positive 4.2 percent in 2004.

Fifteen (15) out of Twenty (20) Sub-sectors decline in Durable Equipment

The political uncertainty which hounded business and government adversely affected investments in capital formation as Durable Equipment dropped to 7.8 percent from the 5.9 percent growth registered a year ago. Decreased investments were registered in fifteen (15) out of the twenty (20) types of fixed asset investments.

Significant expansions in investments were however noted in the following: Other Electrical Machinery and Apparatus, which shot up by 71.4 percent from negative 43.0 percent; Air Transport, up by 1,509.1 percent from 47.2 percent; and Telecommunications and Sound Recording Equipment, up by 29.5 percent from 26.0 percent. On the other hand, decelerated growths were posted by Mining, Construction Machineries at 5.4 percent and Road Vehicles which slowed down to 3.3 percent from 65.2 percent in 2004.

The biggest decline in investments during the period was recorded in: Office Machinery and Data Processing, which dropped further to negative 34.0 percent from negative 0.2 percent; Other General Industrial Machineries, with negative 25.7 percent from a positive 0.4 percent; Aircon and Refrigeration Equipment, with a bigger drop of 41.1 percent from negative 8.1 percent; Other Special Industrial Machineries, negative 17.2 percent from negative 11.1 percent in 2004; and Pumps and Compressors, negative 39.2 percent from positive 13.5 percent. Decreases in growth were also noted in Other miscellaneous durable equipment, Metal working machineries, Textile machineries, and Agricultural machineries.

Investments in Breeding Stocks, Orchard Development and Afforestation continue to grow

Capital formation for the combined Breeding Stocks, Orchard Development and Afforestation for the fourth quarter of 2005 accelerated by 2.0 percent from a growth of 1.2 percent in 2004, due to the increase in the production of Livestock and Orchard development.

GROSS DOMESTIC CAPITAL FORMATION BY TYPE
4th Quarter 2005 and 4th Quarter 2004
AT CONSTANT 1985 PRICES, IN MILLION PESOS

Source: National Statistical Coordination Board (NSCB)

Posted 30 January 2006.