Monday, July 11, 2011

11/07/2011: Industrial production for May 2011

Industrial Production data for May was published earlier today by CSO, so here are updated charts and some core results:

Per CSO: "Production for Manufacturing Industries for May 2011 was 0.3% higher than in May 2010. The seasonally adjusted volume of industrial production for Manufacturing Industries for the three month period March 2011 to May 2011 was 1.4% lower than in the preceding three month period." Let's add some more analysis to that:
  • May level of production in Manufacturing stood at 110.9, down 0.18% on 3 months ago and up 0.54% yoy.
  • There was zero change mom from April.
  • May 2011 index stood 2.43% above the comparable period in 2007. Last 3mo simple average of industrial production was 1.28% below the same figure for 3 mo before and 1.75
  • % above the same period yoy.
  • So on the net, there is roughly no improvement since Q2 2010.
All industries high level data:
  • May index for volumes in All Industries stood at 109.6, up from 109.1 in April (+0.46% mom) and up 0.27% on 3 mo ago. Index is up just 0.09% on May 2010.
  • Index is now up 1.56% on May 2007
  • 3mo average to May 2011 fell 1.24 compared to 3 mo period before but rose 1.27% yoy.
  • So just as with volume index for Manufacturing, All Industries volumes remain relatively flat since Q2 2010.
Again, per CSO: "The “Modern” Sector, comprising a number of high-technology and chemical
sectors, showed an annual decrease in production for May 2011 of 1.5% while an increase of 4.4% was recorded in the “Traditional” Sector." Some more details:
  • Modern Sectors volume of production fell 0.88% mom from 124.8 in April to 123.7 in May, relative to 3mo ago index is down 0.72% and yoy index is down 1.12%. Index is now 13.51% above the reading in may 2007 - an impressive cumulated performance.
  • However, the current 3mo average declined 1.93% on previous 3mo average, though March-May 2011 stands 0.79% above the same period average year ago.
  • So again, moderately flat trend along 123.8 since Q2 2010.
  • Traditional sectors reversed 3 consecutive months of relatively shallow declines in May to show a 5.83% mom improvement - a strong monthly gain. Index is now 4.04% up on 3mo ago and 4.16% up yoy. However, index remains 12.78% down on May 2007 levels.
  • Traditional sectors volume index average for 3mo to May is 0.26% above 3mo average for the period before March and 2.25% above same reading for 2010.
  • On the net, strong showing in Traditional Sectors in terms of volumes.

What about the Turnover indices:
  • Turnover index for Manufacturing Industries rose to 99.6 in May from 98.2 in April (and increase of 0.91% yoy and 1.43% mom). This seems to contradict recent PMIs showing compressing profit margins in recent months, though PMIs are leading indicators while the reported indices reflect activity at the time. Turnover in Manufacturing is now 7.06% below the same reading for 2007. 3mo average through May 2011 is 2.79% below that for the 3mo period through February 2011 and 2.48% above the comparable period in 2010. The change during 2011 so far is not enough to attain the 12mo high of 102.1 achieved in January 2011, though we are moving in the right direction.
  • Turnover index for Transportable Goods industries also rose from 97.8 in April to 99.2 in May, registering a mom increase of 1.43%, a 3mo rise of 0.61% and a yoy increase of 1.02%. Relative to may 2007, index now stands at -8.18%. 3mo average has moved down 2.67% relative to 3mo through February 2011 and is up 2.34% yoy.
  • Finally, New Orders Index rose strongly from 98.4 in April to 100 in May, up 0.20 on 3mo ago, +2.35% yoy and +1.63% mom. Index is now down 7.42% compared to same period in 2007. 3mo average through May fell 3.58% compared to 3mo average through February, but is up 2.47% on a year ago.

To sum, up, slower growth rates in Turnover Indices and New Orders index, as well as contracting indices in volumes for Manufacturing and and Modern Sectors, plus slower growth in Volume index for All Industries suggest that overall PMI signals of slower growth through May are holding. Traditional industries bucked the trend here, but we can expect further small slowdowns in June and July. Growth, to put it briefly, is flattening out in the sector.
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