Wednesday, May 14, 2014

March 2014 Industrial Production

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.

Technical Notes:

March 2014 Industrial Production Index report from the Department of Statistics


  1. Wow, Hisham - it looks as if you've secured the "Good Housekeeping seal of approval" from a "Singapork" newspaper!

    Today's Singapore Business Times (16 May) carried a commentary by it's KL-based reporter S Jayasankaran.

    Titled "M'sia expected to beat growth forecasts in Q1", he wrote:

    " Malaysia's gross domestic product expansion in the year's first quarter, which will be released today, could be a lot higher than anyone thinks.

    "Most economists have estimated the figure to be between 4.6 per cent and 5.4 per cent, but Hisham H, an economist whose blog 'Economics Malaysia' is fast developing a reputation for incisive economic analysis, begs to differ.

    ""I'd say that anything below 6 per cent would be disappointing," he wrote in a blog post analysing the latest industrial production data yesterday...."

    Way to go, Hisham!

    Can we now expect to see you and the Warrior 231 guy in action at economic conferences and forums in "Singapork" and in robust debate with Singapore-based economists such as Song Seng Wun (CIMB), Leong Wai Ho (Barclays) and Vishnu Varathan (Mizuho)?

    Given Warrior's trenchant views on the "Singapork" economy, and your own oft-expressed polite scepticisms about the city-state's finances, that would be a discussion well worth attending!

  2. Hahahahaha, , a moronic Sang Kancil from the normal ones you get in them fables. A welcome change indeed.

    Dei moron:

    1.Warrior 231 is not a trained economist and never claimed or claims to be one.

    2.Bulls eye to HishamH. Kudos to him despite our disagreements on certain issues. And praises are deserved where they are due. Stuff that in your mite-sized brains, Sang Kancil. It will come useful elsewhere.

    So run on now...lil runt and dont forget to tar yourself in feathers, and smear your face with poo. Then hide in them bushes lest some smart crock gets to dine on an imbecile mousedeer at long last.

    By the way, all crocks know who you are.........

    Warrior 231

    1. Oops, your slip is showing, mate!

      Did I say anywhere in my post that you are a trained economist?

      Your hangups about "Singapork" are well known, and the stuff of fable. So, too, your dire predictions of doom and gloom for the Singapork economy.

      But, hey, they are still around. As Hisham will attest to.

      So, spare us your "links" and "cross references", because, to put it politely, they amount to crap all.

      Let's see the state of play in Asean, come 2020.

      Maybe, by then, China and India will be calling the shots.

      Who will be laughing then, eh?

  3. Warrior, hmm effect of the grass wearing off .... but kudos to Hishamh.

    Indeed Singapore seem to have some issues ...

    Zuo De

  4. Zuo De & Warrior,

    It's taken a while, but I think I've finally got a handle on SG public finances and how its structured together, thanks to some commentators and my own digging. I think Prof Balding is absolutely correct in criticising the management of Temasek and GIC - there's no obvious benefit to the people of SG, only to the government of SG.

    Having said that, I think he's wholly wrong in thinking there is a hole in SG public finances. There isn't. SG public debt is used for very specific purposes that can be traced, and none of it goes to either of the SG SWFs.

    Approximately half is monetary debt, similar to the way BNM uses BNM BIlls. This is being phased out, as MAS is now authorised to issue its own debt to manage financial sector liquidity. The other half is used to finance HDB land acquisition and property development, which is then repaid through purchases (partly) financed through CPF withdrawals.

    In essence however, this makes CPF more of a credit union or building society than a retirement provident fund. In that sense, Balding has a point - I don't see a real advantage in this approach, as while it provides a solid foundation for asset values and provides a cheap means of house ownership, it traps Singaporean retirement savings in a single asset class which is hard to liquidate, and may or may not provide adequate returns.

    It's not quite as bad a picture as Prof Balding paints - citizens do get to keep the capital gains from house ownership - but any half trained investment manager would throw their hands up in horror at such an arrangement.

  5. Jeeez…you have gone soft on Spork, haven’t you dude?hahahaha But even your apologia for Spork’s financial shenanigans cannot hide the fact that yellows over there are being ripped off by their own gomen….hahahahaha.

    And that gomen is dominated by ….yeah you guessed it right, yellows as well….sort of a thief ripping off a thief scenario aint it or a skunk outskunking its own kind….haahahaahaaha (ROFLMAO …..teary eyed at that!!!). As the wise would say, it takes one own kind to ……err…….a#%ef***k , one’s own….hahahahahahaha

    Fact of the matter is moneylaundering, thieving, conning can only get one so far before them roosters come roosting from another direction. When I showed them UNDP figures on international capital/stock flows to a banker over there, he squirmed in his chair before acknowledging the inevitable. Only maybe,the Caymans and Switzerland have perfected the scam better……and banker boy was from the yellow stock too,mind you. And I haven’t got into other scams yet like last year’s Non-deliverable Forwards (NDF) rigging, the complete report of which is still awaited after long promised…..hahahahahahaha or this:

    Finally, to be ripped off in the CPF stakes as Balding puts it would have been downright insulting/demeaning to the ethnic superiority complex, wouldn’t it? I mean I can imagine mouths agape as they try to figure out “how on earth dint our superior brains figure out something so simple sooner”…….if you get my drift…hahahahahaha.

    But the fact remains- conned they have been, still are and always will be - but I guess they don’t mind as they love being a**ef*****d to a t. hahahahaaha. Cultural……..mah.

    But still credit where’s due. Spork sure knows how to protect those ill-gotten gains as I said earlier in your earlier post below, after all survival trumps everything else, right?

    Whatever it is …the yellows are living walking s*^%. Not only a bunch of shafted stupid bleary eyed gullible yobs but xenophobic ones at that :

    And that despite Balding’s own apologia in an earlier post:

    Warrior 231