Japan Industry

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Japan: Industrial production drops in May

June 29, 2015

In May, industrial production declined 2.2% over the previous month in seasonally-adjusted terms, which contrasted the revised 1.2% increase recorded in April (previously reported: +1.0% month-on-month). May’s print exceeded the 0.8% drop that market analysts had expected.

According to the Ministry of Economy, Trade and Industry, the categories that made the greatest contributions to the monthly expansion were transport equipment, chemicals (excluding drugs) and electronic parts and devices. Meanwhile, the government downgraded its basic assessment of industrial production, stating that output is “see-sawing.”

On an annual basis, industrial output fell 4.0% in May, which contrasted the 0.1% increase tallied in the previous month and marked the largest contraction in nearly two years. Annual average growth in industrial production fell from minus 0.7% in April to minus 1.1% in May, thereby reaching an 18-month low.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 1.5% expansion in June, which contrasted the 0.5% drop that was forecast in the previous month’s survey. Manufacturers expect a 0.6% expansion in July.

FocusEconomics Consensus Forecast panelists see industrial production expanding 1.1% in 2015, which is down 0.5 percentage points over the previous month’s projection. In 2016, the panel expects industrial production to rise 2.4%.


Author: Ricard Torné, Lead Economist

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Japan Industry May 2015 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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