The March numbers that came out on Monday didn’t show a full picture of health, but did confirm that 1Q2014 growth is going to be pretty decent (log annual and monthly changes; seasonally adjusted; 2000=100):
Annual growth came off the February highs, but this is mainly due to the base effect. Growth on the month was also lower, dragged down by a decline in electricity output. But both manufacturing and mining output were higher in March than in February.
More interesting still is the implication for GDP growth for 1Q2014 (RM millions):
The IPI-based forecast suggests 4.9% yoy (± 2%), a little lower than last quarter’s 5.1%. That’s not too shabby, all things considered.
However, my two weighted average forecasts (which use a variety of indicators) are substantially more positive. The model 1 forecast is a spiffing 5.9% (±1%) while model 2 is an even stronger 6.4% (±1.2%) – the un-weighted average is 6.6%. Most of the individual indicators are suggesting growth just as strong or even stronger – the current quarter export model for instance says 7.4%(!).
On that basis, I’d say anything below 6% would be disappointing. We’ll find out on Friday.
March 2014 Industrial Production Index report from the Department of Statistics