Japan Industry


Industrial production declines slightly in August

In August, industrial production fell 0.7% over the previous month in seasonally-adjusted terms. The print contrasted the 3.4% rise seen in July (previously reported: +3.2% quarter-on-quarter) - which had marked the strongest expansion since June 2011 - and the 0.4% increase that markets had expected.

According to the Ministry of Economy, Trade and Industry, the sectors with the greatest contribution to the monthly decrease were general-purpose, production and business oriented machinery, as well as chemicals. Despite the deterioration observed in August, the government maintained its basic assessment that Japan's industrial production is, "showing signs of picking up at a moderate pace."

On an annual basis, industrial output contracted 0.2% in August, which contrasted the 1.8% increase observed in July. Annual average growth in industrial production, however, rose slightly from minus 5.1% in July to minus 4.8% in August.

Meanwhile, the Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 5.2% increase in September, which is above the 1.7% expansion that was forecasted in the previous month's survey. In addition, manufacturers expect a 2.5% rise in October.

FocusEconomics Consensus Forecast panelists see industrial production flat at 0.3% in 2013, which is down 0.3 percentage points over the previous month's projection. In 2014, the panel expects industrial production to rise 4.5%.

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Japan Industry Chart

Japan Industry August 2013

Note: Month-on-month changes of seasonally adjusted industrial production and year-on-year growth rate in %.
Source: Ministry of Economy, Trade and Industry (METI) and FocusEconomics calculations.

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