Friday, September 13, 2013

July 2013 Industrial Production

Something is in the wind. US Purchasing Managers Indexes zoomed up in June, and lo and behold, Malaysia’s IPI is following suit (log annual and monthly changes; seasonally adjusted):



Mining is up 14.6% in annual log terms for July, no doubt due to higher average crude and gas prices (note however, that it’s down on a m-o-m basis). But manufacturing is climbing too, at 5.6%, and is also up on the month. Even Electricals and electronics output is turning around, something I did not expect to see (index numbers):


I hate extrapolating off one month’s worth of data, but what with the improvement in the external environment, it looks like the long doldrums endured in the export sector is finally starting to dissipate.

The impact on GDP ought to be just positive:


The IPI based forecast suggests 3Q2013 growth should come in at 4.8% (± 2%), accelerating from the 4.3% seen in 2Q. The weighted average forecast currently stands at 4.7% (± 1%).

Technical Notes:

July 2013 Industrial Production report from the Department of Statstics (warning: pdf link)


  1. Dear sir,
    off topic I have a question, is there any particular reason as to why operating expenditure of government is higher than its development expenditure over time, based on historical data? Or is it a normal thing for government around the world run its budget on that trend?

    is there any reading elsewhere on the net i can find? It seems that write ups on these aspect of government spending not seem very well highlighted in popular media. And is there any government that today allocate huge sum for development expenditure?

    Thank you sir

    1. Causarina,

      Most countries don't bother dividing their budgets this way. So far as I've seen, only Singapore and Malaysia do so.

      As to why operating costs are higher than development spending, I don't think that's not unusual. Investment (which is what the development budget is spent on), even in the private sector, tends to be less than consumption/operating costs.