Japan Industry October 2019


Japan: Industrial production contracts sharply in October

November 29, 2019

Industrial production declined 4.2% on a month-on-month and seasonally-adjusted basis in October, contrasting September 1.7% increase. The print was the steepest decline since February 2018 and undershot the 2.1% drop that market analysts had expected.

The categories that drove the month-on-month contraction were motor vehicles, general-purpose and business-oriented machinery and production machinery, in that order. Lower output for these categories was partially offset by increases in production of electronic parts and devices, petroleum and coal products and ceramics, stone and clay products.

On an annual basis, industrial output declined 7.4% in October, contrasting September’s 1.3% expansion. The annual average variation in industrial production fell from minus 0.9% in September to minus 1.9% in October.

The Survey of Production Forecast showed that manufacturers are becoming more pessimistic. Manufacturers now expect industrial output to have recorded a 1.5% monthly decrease in November, sharper than the 1.2% drop forecast in the previous month’s survey. They, however, project a 1.1% expansion in December.

FocusEconomics Consensus Forecast panelists see industrial production expanding 0.2% in 2020, which is down 0.1 percentage points over the previous month’s projection. For 2021 the panel expects industrial production to increase 1.0%. .

Author: Ricard Torné, Head of Data Analysis

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Japan Industry Chart

Japan Industry October 2019 1

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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