Wednesday, June 12, 2013

April 2013 Industrial Production: Green Shoots

After some fairly unenticing numbers in 1Q2013, industrial production in April showed some signs of life (log annual and monthly changes; seasonally adjusted):



Both the annual and monthly growth numbers showed surprising strength almost entirely driven by manufacturing, as electricity and mining output stayed pat.

It’s hard to be too enthusiastic about this though, as manufacturing output is still below that of 4Q2012 and purchasing and production data coming in from overseas is still pretty weak – while the US appears to be on a sustainable recovery path, China is continuing to slow and Europe remains trapped by fiscal austerity and overly tight monetary policy.

Nevertheless, I’m a bit more optimistic about growth prospects for 2Q2013 (log annual changes):


Based on the April data, GDP should be a little higher in 2Q2013 than in 1Q, at about 4.6% (standard error of 1%). My estimated weighted average forecast (which includes some other indicators) comes in at around 5.4% (s.e.: 0.6%). All a bit more encouraging, though of course, one month’s data is hardly compelling evidence.

Technical Notes:

April 2013 Industrial Production report from the Department of Statistics

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