December 2013 Industrial Production

Yesterday’s IPI report confirms the acceleration in economic growth at the end of last year (log annual and monthly changes; seasonally adjusted):

The overall index rose 4.6% in log terms, largely driven by faster manufacturing output growth, which rose 6.3%. The index growth was capped by flat mining output – on a monthly basis, mining output actually fell 5.9% – otherwise IPI growth would have been even stronger.

Even with the drop-off in mining, the numbers suggests GDP growth for the last quarter should exceed 5.0% (point estimate: 5.3%, 4.7% in log terms):

Decent numbers on the whole, especially given the sharp setback suffered in 1Q2013.

Some of the incoming external numbers suggest 1Q2014 GDP might not be as strong, with mixed signals coming in from the US and Europe. But I think we can safely say the global economy is finally on the mend, even if its not as strong as we would like. We’re in the end game for economic recovery in the advanced economies, with perhaps nasty adjustments needing to be made in some emerging economies.

For Malaysia though, as long as policymakers stay the course, we should be fine. The road ahead is bumpy, but we’re heading in the right direction.

Technical Notes:

December 2013 Industrial Production Report from the Department of Statistics (warning: pdf link)