January 2011 Industrial Production

I wasn’t expecting all that much from the January numbers – coinciding as it does with the beginning of the year and running up to CNY isn’t exactly a good combination for higher output.

Be that as it may, there’s some positive takeaway from the January figures (log annual and monthly changes; seasonally adjusted; 2000=100):

Now from a growth perspective, there’s hardly much to crow about – growth was flat whichever way you measure it. Only year on year manufacturing growth looks even slightly appealing, but even that’s moderated.

The positive note comes from the impact on GDP. My flash estimate of 1Q 2011 real GDP growth shows continued acceleration from 4Q 2010 (RM millions; 2000=100):

Even though the absolute numbers are looking down, the point estimate for that level of output implies 5.3% y-o-y growth compared to 4.8% the previous quarter. The seasonally adjusted annualised rate (SAAR) is even higher at 10.3% in log terms compared to 8.1% in 4Q.

I’m not expecting a setback in February despite the short working month, so these numbers should be at or close to the realisation. So much for a growth slowdown in 1H2011 – the case is growing for monetary tightening earlier rather than later.

Technical Notes:

January 2011 IPI report from the Department of Statistics