Japan: Industrial production declines at fastest pace in 18 months in June
July 30, 2019
Industrial production fell 3.6% on a month-on-month and seasonally-adjusted basis in June, contrasting May’s 2.0% increase and marking the sharpest fall in a year-and-a-half. The print furthermore missed the 1.0% decrease that market analysts had expected by a wide margin.
The categories that drove the month-on-month decrease were motor vehicles; production machinery; and electrical machinery and computing equipment, in descending order. Lower output for these categories was partially offset by increases in production of inorganic and organic chemicals, and petroleum and coal products.
On an annual basis, industrial output fell 4.1% in June, down from a 2.1% decline in May. The annual average variation in industrial production fell from minus 0.4% in May to minus 0.7% in June.
The Survey of Production Forecast showed that manufacturers see production rebounding. They now expect industrial output to have recorded a 2.7% monthly increase in July, up from the 0.3% increase forecast in the previous month’s survey. However, they see output growth slowing to 0.6% in August.
Author: Joffrey Simonet, Economist