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Analysing Our Real Production Output, Decline Due To TC Winston

Industrial Production Index (IPI) is a weighted economic indicator which measures the real production output of different yet relevant industries within the Fijian economy. These include mining and quarrying, sugar,
08 Oct 2016 11:00
Analysing Our Real Production Output, Decline Due To TC Winston

Industrial Production Index (IPI) is a weighted economic indicator which measures the real production output of different yet relevant industries within the Fijian economy.

These include mining and quarrying, sugar, electricity and manufacturing. Investors and the general public can use this data to monitor and forecast growth in respective industries.

A growth on a quarter-on-quarter for a particular industry signifies that the companies within that industry are performing well.

Fiji’s Industrial Production Index is called The All Group Industrial Production Index. The March quarter of 2016 stood at 99.3.

Compared to its previous December 2015 quarter, there was an aggregate decline of 10.7%.  The major industry movements for the March quarter 2016 were as follows:

– Mining and Quarrying Index decreased by 6.7%

– Meat & Meat Products Index decreased by 6.0%

– Sugar Index decreased by 100%

– Non-alcoholic beverages and cigarettes index increased by 5.6%

– Wearing Apparel Index decreased by 0.4%

– Electricity index increased by 0.3%

 

The All Groups excluding sugar shows an increase of March 2016 quarter compared to December 2015 quarter.

Worthy to note that sugar production is seasonal and harvesting is done later in the year.

The significant weight placed on the sugar index means that a dramatic fluctuation (example 100% decline of March quarter 2016 from December quarter of 2015) of production volume has a big impact on the overall index.

Therefore to measure the real Industry Production Index for other industries aggregately, it is advisable to exclude sugar production.

 

Conclusion

The All Group Industry Production Index as at March quarter of 2015 compared to the March quarter of 2015 was a decrease of 7.1%.

The decline is a result of reduction in production of industries such as mining & quarrying, meat & meat Products, electricity and alcoholic drinks.

The decline could be due to the effects of cyclone Winston which hit Fiji in late February 2016.

The Fijian economy seems have recovered well in the March quarter 2016 in response to the natural disaster.
This is an informative publication, sponsored by The Fiji Sun, Fiji Bureau of Statistics and HFC Bank. All views expressed or implied are purely of the Treasurer at the HFC Bank, Peter Fuata.

 



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