Japan Industry January 2019


Japan: Industrial production contracts sharply in January

February 28, 2019

Industrial production declined 3.7% on a month-on-month and seasonally-adjusted basis in January, following December’s 0.1% contraction. The print undershot the 2.5% drop that market analysts had expected and the steepest fall in a year.

The categories that drove the month-on-month fall were motor vehicles, transport equipment (excl. motor vehicles) and production machinery, in that order. Lower output for these categories was partially offset by increases in production of petroleum and coal products as well as chemicals.

On an annual basis, industrial output was flat in January, following the 1.9% decrease in December. Annual average growth in industrial production fell from December’s 1.0% to 0.9% in January.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a 5.0% monthly increase in February, up from the 2.6% increase forecast in the previous month’s survey. Manufacturers expect a 1.6% decrease in March.

FocusEconomics Consensus Forecast panelists see industrial production rising 1.1% in 2019, which is down 0.5 percentage points over the previous month’s projection. For 2020 the panel expects industrial production to expand 0.9%.


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Japan Industry Chart

Japan Industry January 2019

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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