If you’re a pessimist over Malaysia’s economy. stop reading now. This post might be a little challenging.
Most months, industrial production and trade numbers generally track each other. This time, while export growth was somewhat positive, industrial output was by comparison positively bubbly. Yesterday’s industrial production report shows output building on last month’s positive increase and accelerating to 7.2% y-o-y in log terms (annual and monthly log changes; seasonally adjusted):
Some slight explanation is in order here, as the unadjusted numbers show negative growth on the month – industrial production almost always falls in November, as shipments for the the year-end holiday shopping season trail off. This year, the pullback in production was half what it was last year.
Probably the bigger surprise (for me anyway) is in the “increase” in mining output, though I don’t think it will sustain.
In any case, what the IPI says for 4Q2012 GDP growth is illuminating – an IPI-based forecast yields a growth rate of 7.4%, which would be the fastest the economy would have grown since 2Q2010 (9.3%):
Just bear in mind that the standard error generated by the regression is around 1.3 percentage points, which yields a 95% range forecast of about ±2.5%, which is a little larger than normal.
My weighted average forecast, which includes other indicators, is a more reasonable 5.5% (±0.5%), which would give full year growth at also 5.5%. That’s much higher than any of last year’s private forecasts for 2012. Coupled with the jump in capital goods imports for November, growth momentum might be building up further for the Malaysian economy.
November 2012 Industrial Production Index report from the Department of Statistics (warning: pdf link)