While today’s preliminary industrial figures came in below expectations, we would not come to the solid conclusion that this is a great negative surprise. As for the outlook for 2012, we expect 3.5% growth. The decline in the manufacturing sentiment indicators in the autumn months to below 50 suggest that export performance may be less favourable than in 2011.

Effect of fewer working days in December 2011 shows in figures

Today’s preliminary industrial data came in lower than expected, showing 6.7% yearly wda growth, while the unadjusted increase was only 2.1% in yearly terms. The difference between the two figures is due to that in the last month of 2011, there were two working days less than in 2010. Our forecast for the wda growth was 10.5%. The monthly index shows a strong, 7.5% decline. The growth of the industry for the full 2011 year arrived at 5.4% vs. our 5.8% expectation.

Despite the significant difference between the actual data and our forecast, we would not come to the solid conclusion that this is a great negative surprise. The uncertainty was very high concerning today’s data prior to the release. The fact that the 2010 December m/m figure was revised up to -10.5% from the -13.8% posted just one month ago, clearly reflects this. All in all, December industrial figures are strongly affected by one-off year-end production cuts, and the actual figures are often revised by the CSO later, which make them hard to predict.

As for the outlook for 2012, we expect 3.5% growth. The decline in the manufacturing sentiment indicators in the autumn months to below 50 suggest that export performance may be less favourable than in 2011. Nonetheless, the last 1-2 releases show an improvement in the sentiment.