Moderate yet not bad production in November

Industrial production expanded 3.5% y-o-y in November in calendar-adjusted terms, below the market consensus of 4.3%. In unadjusted terms, industrial production grew 3.6%, which was also below the consensus (5.3%). However, the first two months of the final quarter suggest industrial production growth of 9% compared with the same period of 2014. Hence, the data suggest that 4Q15 GDP growth should be strong, barring a dramatic collapse in December.

Capital goods production was again the leading category, expanding 10.4% y-o-y in calendar adjusted terms during the month, following 24.3% growth in October. Durable and non-durable goods production grew by a more modest 1.7% and 1.0%, respectively, while intermediate goods production was up 2.9%. Machinery and equipment production growth was again in negative territory but improved to -0.13% y-o-y from -7.7% in October. All this still does not point to a significant recovery in investments, despite the encouraging signal from capital goods production. Export sector production was strong in November, apparel and base metals each posting 6.2% growth and motor vehicles output expanding 10.9%. The overall picture is improving somewhat, given that manufacturing output rose 4.3%, which implies 4.7% y-o-y growth in October-November in calendar-adjusted terms. This also confirms our view that 4Q15 GDP growth could be strong enough to boost overall GDP growth in 2015 to our forecast of 3.5%.