Industrial growth keeps sputtering

According to the preliminary data, industrial production contracted by 0.6 percent in September on an annual basis. Export sales presumably remained the factor that held down industrial growth. Although the working day adjusted output grew at a meager pace of 2.2 percent, this is below the cumulative rate of the first nine months, 3.1 percent, a pace that is a sore disappointment in itself. Compared to the previous month, industrial output fell by 2.1 percent, which means that much of the upturn in August was reversed in September. At this point, it is doubtful whether the earlier clearly rising trend will return at all during the rest of the year.

Even so, the year-on-year growth rate is likely to accelerate somewhat in the coming months – if for no other reasons because September was the last month where negative working day effect was at play – but the degree of acceleration is highly uncertain. At this point, an annual industrial growth rate of slightly above 4 percent seems the best of possible scenarios for 2018.

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