Japan Industry


Industrial production expands at strongest pace in more than two years

In July, industrial production rose 3.2% over the previous month in seasonally adjusted terms, which marks the strongest expansion since June 2011. The reading contrasted the 3.0% contraction observed in June, but undershot market expectations of a 3.6% rise.

According to the Ministry of Economy, Trade and Industry, the sectors with the greatest contribution to the monthly increase were general-purpose, production and business oriented machinery, as well as electronic parts and devices. Amid the ongoing improvement in recent months, the government asserts that Japan's industrial production is, "showing signs of picking up at a moderate pace."

On an annual basis, industrial output increased 1.6% in July, which contrasted the 4.6% decrease observed in June. Moreover, annual average growth in industrial production rose slightly from minus 5.2% in June to minus 5.1% in July, which reversed the declining trend.

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 0.2% increase in August, which is above the 0.9% contraction that was expected in the previous month's survey. In addition, manufacturers forecast a 1.7% rise in September.

FocusEconomics Consensus Forecast panellists see industrial production flat at 0.0% in 2013, which is down 0.5 percentage points over the previous month's projection. In 2014, the panel expects industrial production to rise 4.6%.

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Japan Industry Chart

Japan Industry July 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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