Japan: Industrial production continues to rise in January
February 29, 2012
In January, industrial production rose 2.0% over the previous month in seasonally adjusted terms, following on from December's strong 3.8% expansion. Moreover, the print overshot market expectations that had factory output increasing 1.5%. On an annual basis, although industrial production declined 1.2% in January, it was still above both the 4.3% contraction recorded in the previous month and the 1.6% drop expected by the market. According to the Ministry of Economy, Trade and Industry, the monthly increase was mainly driven by strong gains in transport equipment and general machinery, information and communication electronics equipment, and iron and steel production. On the downside, the electronic parts and devices category declined. Meanwhile, the government upgraded its assessment on Japan's industrial production for the first time since May last year, citing ?signs of an upward movement.? Analysts reckon that industrial production benefited as supply chain disruptions, caused by the devastating floods in Thailand late last year, began to recede. According to the Survey of Production Forecast, manufacturers are more upbeat and see industrial output expanding 1.7% in February, up from the 1.5% rise expected in the previous month's survey. A 1.7% increase is also expected in March.