Well, well, thing are looking a bit brighter now. September 2012 industrial production numbers hint that 3Q2012 growth is likely to be stronger than originally anticipated (log annual and monthly changes; seasonally adjusted):
It certainly seems to be a full-blown Ramadhan effect – I’d expect October numbers to fall back a bit in response. Output for September increased across the board, and for both annual and monthly growth metrics, except for mining which was flat month on month.
Nevertheless, the numbers paint a much rosier picture of output and economic activity in 3Q2012 than I had originally feared. My IPI based forecast has now risen to 4.6% in log terms and 4.8% in percentage terms, which are more in line with the scale and scope of investment activities that we’ve seen so far this year.
The composite forecast model generates an even higher forecast, pegging growth at about 5.6% (percentage) with a 2 s.d. range forecast of between 4.6%-6.6%. The 50% probability range would be between 5.3%-5.9%.
Bottom line is that 3Q2012 growth is likely to fall into the same range as in the first half of the year, which means that full year growth above 5.0% is still a distinct possibility.
September 2012 Industrial Production Index report from the Department of Statistics (warning: pdf link)