Industrial output disappoints in Malaysia, Germany and UK, but is soft patch over?

In news out yesterday, March industrial output in Malaysia, Germany and the UK all turned out lower than expected.

Malaysia's March Output Weaker Than Expected
Malaysia's industrial output grew surprisingly slowly in March as a labor crunch limited manufacturing production, economists said Monday. According to the Statistics Department, the Index of Industrial Production - which measures output levels in the manufacturing, mining and electricity sectors - rose 5% over the year in March. A moderation in growth had been expected, but the sharp slowdown took economists by surprise...

German March Industrial Production Falls on Oil Price
Industrial production in Germany, Europe's largest economy, fell for a second month in March, adding to evidence the surge in oil prices is eroding growth. Production at factories, construction sites, utilities and mines declined 0.8 percent from February, when it dropped 2.1 percent, the Economy and Labor Ministry in Berlin said today. Economists expected production to fall 0.4 percent, the median of 40 forecasts in a Bloomberg survey showed...

UK March manufacturing output falls 3rd month in a row; to weigh on Q1 GDP
Manufacturing output in the UK...fell for the third month running in March signalling that sector is in decline, official figures showed today. The office of National Statistics revealed that manufacturing output in March fell 1.6 pct from the previous month against expectations of a modest 0.1 pct increase...

The wider measure of industrial production, which also includes such things as oil production and therefore accounts for just over 20 pct of GDP, was 1.2 pct down on a monthly basis against expectations of a 0.1 pct improvement...

Less surprisingly, the Bank of England elected to leave interest rates unchanged at 4.75 percent yesterday.

Last Friday's report on US job gains leaves at least some hopeful that the "soft patch" is over -- for example, Morgan Stanley's Richard Berner and David Greenlaw:

Is the Soft Patch Over?
Strong job and income gains have suddenly changed the color of the expansion, from fragile to vigorous, and have reawakened inflation concerns -- or have they? While we’ve scaled back our 2005 growth forecast from 3.8% a month ago to 3.5% today, we believe that the analytics for a sustained, hearty rebound are intact, and that upside risks to inflation will persist. Nonetheless, it will likely take a few more months of hearty data to convince consumers and investors that the economy’s resilience has overcome hurdles to growth and that stagflation is unlikely...

And yesterday's report on US wholesale inventories probably did not change that view.

Weak wholesale stocks signal softer GDP
Inventories at U.S. wholesalers rose a smaller-than-expected 0.4 percent in March, Commerce Department data showed on Monday, prompting economists to cut forecasts for first-quarter growth... The weaker March number was due in part to a decline in the stockpile of cars and professional equipment like computers.

The Commerce Department said inventories of durable goods...edged up 0.1 percent in March. Inventories for non-durable items increased 1.0 percent as stocks of petroleum jumped 9.3 percent, the largest increase since July 2004.

"Based on this result, we now see Q1 GDP being revised down to plus 2.8 percent from plus 3.1 percent," said Morgan Stanley economist Ted Wieseman... The first quarter had already seen a large buildup of inventories, and if that number is revised down, it may not be all that bad for growth, Wieseman said, because stocks would probably have fallen in the second quarter anyway. Overall, the latest indications are that the U.S. economy is still healthy...

We'll get more economic indicators over the next few days. Whether the picture becomes clearer is another matter.