HOT: Philippine Industrial Production Turns NEGATIVE in September! (Update: Correction on data: Still POSITIVE)

Remember this?

That’s investments during the 2Q14 statistical GDP. The decline of investments had been concealed by the property bubble that has led the consensus to celebrate the headline 6.4% G-R-O-W-T-H!

Here is what I wrote then: (bold added)

So from the expenditure perspective, 2Q GDP tell us that household growth has been losing momentum, and importantly, investments has been on a decline and has even been accentuated by the “plunge” in durable equipment.

These have been happening outside any weather or external related strains…

Why is this important?

Because investments drive growth. Business spending represents future income, earnings, demand, consumption, jobs, wages, innovation, dividends, capital gains or what we call as growth.

This also means that if the downturn in investments represents an emergent trend, then current rebound may just be temporary and would hardly account for as resumption to “high trajectory growth”.

About a few hours back Trading Economics released the Philippine industrial production data for September:

Surprise! The G-R-O-W-T-H number is NEGATIVE!!! Industrial output has not only been in a decline, it has retrenched in September!

…

Industrial Production in Philippines decreased 1.20 percent in September of 2014 over the same month in the previous year. Industrial Production in Philippines averaged 9.23 Percent from 1986 until 2014, reaching an all time high of 68.60 Percent in April of 1988 and a record low of -26.60 Percent in January of 2009. Industrial Production in Philippines is reported by the National Statistics Office of Philippines.

And more than that, it’s been a short term TREND since May 2014 or even seen from the December 2013 high of 17.8%. 

What is clear is that industrial output has been losing momentum. This validates the ongoing slump in investments. 

So statistical GDP will now depend on external trade, households and the property boom.

However should this momentum continue this is likely to spread to the wider economy as noted above (profits, income, earnings, demand, capex) thus much of the consensus--with entrenched belief that "this time is different"--will face a rude awakening as G-R-O-W-T-H will evaporate.

Tick tock tick tock.

Updated to RECTIFY: 

I guess Tradingeconomics.com made an error so they revised to show a still positive 3.8% for the September data, as can be seen in the new chart.

Here is the modified report:

Industrial Production in Philippines increased 3.80 percent in September of 2014 over the same month in the previous year. Industrial Production in Philippines averaged 9.25 Percent from 1986 until 2014, reaching an all time high of 68.60 Percent in April of 1988 and a record low of -26.60 Percent in January of 2009. Industrial Production in Philippines is reported by the National Statistics Office of Philippines.

NSO data can be seen here.

So while it is not NEGATIVE anymore the declining trend remains.