Japan: Industrial production contracts in August
Industrial production fell 1.2% on a month-on-month and seasonally-adjusted basis in August, contrasting July’s 1.3% increase. The print undershot the 0.5% decrease that market analysts had expected.
The categories that drove the month-on-month drop were iron, steel and non-ferrous metals, production machinery and motor vehicles, in that order. Lower output for these categories was partially offset by increases in production of electronic parts and devices, chemicals and inorganic and organic chemicals.
On an annual basis, industrial output contracted 4.7% in August, contrasting July’s 0.7% rise. The annual average variation in industrial production fell from minus 0.8% in July to minus 1.2% in August, the lowest reading in over three years.
The Survey of Production Forecast showed that manufacturers are becoming more pessimistic. Although manufacturers now expect industrial output to have recorded a 1.9% monthly increase in September (contrasting the 1.6% decrease forecast in the previous month’s survey), they project a 0.5% decrease in October.