Japan Industry

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Japan: Industrial production declines at fastest pace in 10 months in April

May 30, 2014

In April, industrial production dropped 2.5% over the previous month in seasonally-adjusted terms, which contrasted the revised 0.7% increase recorded in March (previously reported: +0.3% month-on-month) and exceeded the 2.0% decline that markets had expected. The decrease marked the lowest reading since June 2013.

According to the Ministry of Economy, Trade and Industry, the sectors that made the greatest contribution to the monthly contraction were transport equipment, electronic parts and devices, and chemicals excluding drugs. As a result of the monthly deterioration, the government downgraded its general assessment, stating that industrial production in Japan, “appears to be flat.”

On an annual basis, industrial output expanded 4.1% in April, which was well below the 7.4% increase tallied in the previous month. Nevertheless, annual average growth in industrial production rose from 3.2% in March to 3.9% in April, marking the highest level since May 2011.

Meanwhile, the Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 1.7% expansion in May, which was above the 0.1% increase that was forecast in the previous month’s survey. Conversely, manufacturers expect a 2.0% contraction in June.

FocusEconomics Consensus Forecast panelists see industrial production expanding 4.7% in 2014, which is unchanged over the previous month’s projection. In 2015, the panel expects industrial production to rise 3.2%.


Author: Ricard Torné, Head of Economic Research

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Japan Industry April 2014

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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