Japan Industry


Industrial production unexpectedly falls in February

In February, industrial production fell 0.1% over the previous month in seasonally adjusted terms. The reading contrasted both the 0.3% increase observed in January and market expectations of a 2.5% rise.

According to the Ministry of Economy, Trade and Industry, the sectors that contributed the most to the monthly decline were electronic parts and devices, precision instruments as well as ceramics, stone and clay products. Despite the monthly drop, the government maintained its assessment on Japan's industrial production, stating that "output has bottomed out and shows some signs of picking up."

On an annual basis, industrial production declined 11.0% in February, following the 5.8% decrease witnessed in January. As a result, the trend continues to point downwards, with annual average growth in industrial production falling from minus 0.7% in January to minus 1.7% in February.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic and now see industrial output rising 1.0% month-on-month in March, which is above the 0.3% increase expected in the previous month's survey. Moreover, manufacturers forecast a 0.6% rise in April.

FocusEconomics Consensus Forecast panellists see industrial production expanding 0.2% in 2013, which is up 0.1 percentage points over the previous month's projection. In 2014, the panel expect industrial production to rise 3.3%.

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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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