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.