Japan Industrial production July 2020


Japan: Industrial output growth skyrockets in July

August 31, 2020

Industrial production expanded 8.0% month-on-month in seasonally-adjusted terms in July (June: +1.9% mom). July's reading marked the best result since at least 1990, and was driven by stronger manufacturing output.

On an annual basis, industrial production nosedived 16.1% in July, although softer than June’s 18.2% fall. The trend, however, pointed down, with the annual average variation of industrial production coming in at minus 9.4% in July, down from minus 7.9% in June.

Commenting on the sharp monthly increase, analysts at Nomura preached caution regarding the coming months:

“Production is unlikely to maintain the brisk pace of recovery seen in July. Even the survey of production forecasts [which call for a 4.0% m-m increase in August and a 1.9% m-m increase in September] taken at face value shows weaker growth than July’s 8.0% m-m. We therefore interpret the substantial growth booked in July as a one-time normalization as the drop in production activity caused by the pandemic came to a halt.”

FocusEconomics panelists see industrial production decreasing 11.3% in 2020, which is down 1.7 percentage points over the previous month’s projection. In 2021, the panel sees industrial production recovering 4.8%.

Author:, Economist

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Japan Industrial production Chart

Japan Industry July 20 20

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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