December Production Up in UK, Down in Slovakia; South Africa, Turkey Work Toward More Stable Growth

Industrial production for December was reported over the last 24 hours in several countries, which encompass a variety of industrial environments. Growth in production was dominant, but it appears irregular or hesitant in the varying regions.

Production in the UK was up 0.5% in December, about the same as November's 0.4%; at the same time, it was down 0.6% from a year earlier and up only a slim 0.4% for 2004 as a whole. December's performance looks promising, however, in that a large number of differing industries saw their output expand: furniture, chemicals, machinery and the entire oil/gas complex. Only three sectors experienced declines: paper products, basic and fabricated metals and utilities. UK production has had a lackluster trend since the 2001-02 recession, but perhaps the last couple of months mark a turn toward a firmer trend.

In Slovakia, output was down overall in December by 0.6%, but that followed a strong November gain of 3.9%. That country's industry has seen persistent expansion since 2000, albeit at a diminishing pace. In December, despite the overall decline, more industries had gains than had declines, so growth may well pick up again.

Manufacturing production in South Africa grew 3.1% in December, but with a rough balance in the number of sectors having rises and declines. The total advance was concentrated in consumer goods: furniture, textiles, food and wood and paper products, and energy products had the largest increase. Metals and equipment output declined. Year-on-year, manufacturing production was up a substantial 7.8%. This was the largest 12-month gain in South Africa since September 2002, but perhaps more significant is that month-to-month patterns have become less erratic since then. More stable short-run behavior can contribute to productivity and profitability, making growth more sustainable.

Production in Turkey, by contrast, remains widely swinging from month to month, and if anything, the swings have become greater in recent years. Even so, total growth has been strong: nearly 10% for 2004 as a whole. In December, output rose a large 18.6%; chemicals, metal products and non-metal products (glass and ceramics, for instance) led the surge. The thinness of Turkish industry is suggested by the fact that while those industries rose in December, the strength over the last few years has come from machinery production.