In my last post, I presented the proof of my thesis that the building construction industry in the Philippines doesn’t create a significant number of jobs relative to their expansion and growth rate. I have the same observation in this post, but it’s about profit, profit growth, and profit growth rate this time. “Profit” in this post is “Total Profit”.
Although I use the 2008 and the 2010 data results of the National Statistics Office’s Annual Survey of Philippine Business and Industry, I believe they are still applicable today. Let’s not forget the GDP growth in 2010 was 7.63%, and the average exchange rate of a dollar to pesos was 45.11–no wonder OFW’s were buying condos.
Since my interest in analyzing all these data is about job creation and employment, let’s start with the job growths and the job growth rates in the two industries in 2010, and let’s go further by firm.
Per Industry Per Firm
Job Growth Job Growth Rate Job Growth Job Growth Rate
Construction 9,035 26.956% -28 - 10.181%
Manufacturing 9,131 1.058% 1 0.535%
Now here’s the dough:
Revenue Cost Revenue Cost
Construction 38.391 B 31.298 B 66.958 B 54.471 B
Manufacturing 3.161 T 2.532 T 3.547 T 2.902 T
Here are the profits, the profit growths, and the profit growth rates in both industries
Profit Profit Profit Growth Profit Growth Rate
Construction 7.093 B 12.487 B 5.394 B 76.047%
Manufacturing 629 B 645 B 16 B 2.544%
Let’s equally divide the profits and the profit growths among firms in both industries. The profits in manufacturing are high because petroleum products are included. You know oil companies are greedy too. They deserve a separate post. Still the profit growth and the profit growth rate of a building construction firm in 2010 were way higher. That means quick, easy money for a building construction investor that year.
Per Firm Per Firm
Profit Pofit Profit Growth Profit Growth Rate
Construction 58.139 M 72.599 M 14.460 M 24.871%
Manufacturing 136.650 M 138.919 M 2.269 M 1.660%
A company can profit a lot in the manufacturing industry, but why is the flow of investment in that industry is slow? I wonder if there were greedy investors in 2010 who owned multiple building construction companies. They only needed to own two companies to surpass what a manufacturing company profited in the same year.
Now let’s put profit growth and profit growth rate and job growth and job growth rate side by side and by industry.
Profit Growth Profit Growth Rate Job Growth Job Growth Rate
Construction Firm 5.394 B 76.047% 9,035 26.956%
Manufacturing Firm 16 B 2.544% 9,131 1.058%
Since it’s not the industry that hires employees, let’s see how it goes if we put profit growth per firm next to job growth per firm.
Profit Growth Per Firm Job Growth Per Firm
Construction Firm 14.460 million – 27
Manufacturing Firm 2.269 million 1
Scandalous! Profiting more, hiring less–quod erat demonstrandum. I hate greed, and I equally hate greedy people. Where’s your corporate social responsibility, blood-sucking leeches?