Singapore industrial production output to grow 12.1%

Due to low base effect.

According to DBS, expect an uptick in industrial production this week. Industrial production output is likely to expand by 12.1% YoY, up from 3.9% in the previous month. The headline number will look really impressive.

Here's more:

And questions will be raised on why consensus has recently par down its expectation on growth outlook for the year to 3.8% versus an estimate of 3.9%. But plainly, consensus is not wrong in the sense that there are still pockets of risk in the external environment.

This set of IP number is just a blip, driven mainly from the low base in the same period last year. Note industrial output recorded its lowest level, 83.4 in Feb13. And that essentially will provide significant technical lift to the headline number.

A sequential expansion of about 2-3% is also likely. But that is mainly seasonal as manufacturers ramped up production to meet fresh orders after the Chinese New Year lull period. The point to note is that IP and export numbers within the first two months of every year are always distorted by such seasonal effect. More clarity will emerge from such high frequency data from March onwards.

That said, growth momentum on the external front is likely to be tepid, sideways in the coming months judging from the developments in the global economy.