Asian growth from an unconventional view

The truth is out there - but economists in Asia have to look in some strange places to find it.

Faced with irregular, sometimes dodgy economic data, analysts turn to cement sales, fast food, newspaper sizes or just about anything that helps them understand the fast-growing and often volatile region.

While those who track economies such as France and Britain receive a regular diet of numbers that officials have gone through with fine-toothed combs, analysts in Asia find statistics are patchy or even open to manipulation.

"No single piece of data tells the whole story," said Rajeev Malik, an economist at JP Morgan Chase, who looks at India's gold purchases, air traffic and restaurant queues to get a feel for sentiment in an economy that is surging.

"One has to be a detective and piece things together."

Some unusual numbers reveal trends sooner than official data.

Take, for example, motorbikes in Indonesia. They're a cheap alternative to unreliable public transportation. As such they serve as a barometer of consumer spending across the sprawling archipelago, as well as a leading indicator for growth.

Last September, economists such as Song Seng Wun noticed a big pick-up in motorcycle sales following months of weak sales because of high fuel costs and interest rates.

Early sign

The change was an early sign that a central bank move to trim rates was finally affecting consumers. The gains eventually showed up in fourth-quarter gross domestic product, which had its fastest growth rate in two years.

"It's about finding an indicator that captures economic activities at the simplest level," said Song of CIMB-GK Research.

Official data may fail to capture some informal activity - the smuggling of pirated discs, for example - for countries such as the Philippines, Indonesia and China, Song said.

HSBC Asia-Pacific economist Frederic Neumann, who also watches Indonesian motorcycle sales, said that with so many holes in data across Asia, economists need to be creative.

There is the world's most famous odd economic indicator, the Big Mac index. Created by The Economist magazine, it estimates how much currencies are overvalued or undervalued by comparing the price of a McDonalds Big Mac in different countries.

In China, where investment is pouring in, many economists cross-check official data with unofficial figures such as freight volumes or steel prices.

In fact, Beijing recently took back local governments' rights to calculate regional GDP data after many figures were found to be fabricated.

The need for such cross-checking is not confined to Asia. In the United States, economists joke that the monthly payroll report is more like a monthly raffle because of heavy revisions.

"If you have trouble with the US, you can imagine the trouble you have with China," said Jan Lambregts, head of Asia research for Rabobank.

Alan Greenspan, possibly the most celebrated economic analyst in modern times, was an avid crosschecker. The former Federal Reserve chairman was fond of poring over steel scrap prices or supplier delivery times to stress-test his views.

Offbeat indicators are sometimes all an analyst has.

The Philippines - which recently held back its January budget deficit report without a word of explanation - has a reputation for haphazard data releases.

Learning to cope

But resourceful economists have learned to cope.

When Song of CIMB-GK wants to get a sense of activity in the Philippines, he scrutinises sales at local fast-food chain Jollibee Foods Corp.

"In the Philippines, whether you are the president or the dispatch boy, Jollibee is part of your life," said Song, an Asia economist for more than two decades.

Even in Singapore, which has a highly developed economy and only 4.5 million people to keep track of, the occasional unusual indicator comes in handy.

To confirm whether Singapore's booming job market really is booming, economists monitor the recruitment section of the main daily newspaper. That section swelled to 108 pages in January - offering the largest selection of jobs in seven years.

But economists also advise treating unofficial data with care. For instance, a sharp change in energy consumption could be a sign of a trend - or it could be because a country has become more energy efficient.

Those motorcycle sales in Indonesia are no exception. In February they slowed sharply again. A blip, or the first sign of a wider slowdown?

"All of this data has to be taken with a pinch of salt," said HSBC's Neumann.