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Japan: Decline in industrial production softens in March

April 30, 2015

In March, industrial production declined 0.3% over the previous month in seasonally-adjusted terms, which followed the revised 3.1% drop recorded in February (previously reported: -3.4% month-on-month). February’s print represented the largest decline since March 2011. March’s drop was above the 2.3% contraction that market analysts had expected.

According to the Ministry of Economy, Trade and Industry, the categories that made the greatest contributions to the monthly fall were electrical machinery, petroleum and coal products and fabricated metals. Meanwhile, the government maintained its general assessment of industrial production, stating that output is, “showing signs of increase at a moderate pace.”

On an annual basis, industrial output fell 1.2% in March, which followed the 2.0% decrease tallied in the previous month. As a result, annual average growth in industrial production swung from plus 0.3% in February to minus 0.4% in March, thereby reaching a 15-month low.

The Survey of Production Forecast showed that manufacturers are becoming more pessimistic. They now expect industrial output to have recorded a month-on-month 2.1% expansion in April, which is below the 4.0% increase that was forecast in the previous month’s survey. Manufacturers expect a 0.3% drop in May.

FocusEconomics Consensus Forecast panelists see industrial production expanding 2.4% in 2015, which is up 0.4 percentage points over the previous month’s projection. In 2016, the panel expects industrial production to rise 2.5%.


Author: Ricard Torné, Head of Economic Research

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Japan Industry March 2015

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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