Japan Industry August 2016


Industrial production rebounds in August

In August, industrial production expanded 1.5% over the previous month in seasonally-adjusted terms, which contrasted July’s 0.4% decrease (previously reported: 0.0% month-on-month). August’s print overshot the 0.5% expansion that market analysts had expected.

According to the Ministry of Economy, Trade and Industry, the categories that contributed the most to the monthly acceleration were electronic parts and devices and electrical machinery, information and communication electronics equipment as well as chemicals (excluding drugs). On the other hand, transport equipment, petroleum and coal products as well as fabricated metals declined in the same month. As a result of August’s reading, the government upgraded its basic assessment of industrial production, stating that output was, "showing signs of increasing at a moderate pace."

On an annual basis, industrial output expanded 4.6% in August, contrasting the previous month’s 4.2% decrease. The print marked the strongest growth since March 2014. Annual average growth in industrial production rose from minus 1.6% in July to minus 1.2% in August.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 2.2% increase in September, which contrasted the 0.7% decrease that was forecast in the previous month’s survey. Manufacturers expect a 1.2% expansion in October.

FocusEconomics Consensus Forecast panelists see industrial production falling 1.0% in 2016, which is down 0.1 percentage points from last month’s projection. For 2017, the panel expects industrial production to rise 1.6%.

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Japan Industry Chart

Japan Industry August 2016

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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