Japan: Industrial production eases in February but remains robust
March 30, 2011
In February, industrial production grew for a fourth consecutive month, shored up by resilient overseas demand. The preliminary release showed industrial production grew a seasonally adjusted 0.4% over the previous month. The reading contrasted the 0.1% drop expected by market analysts but represented a deceleration compared to the 1.3% reported in January. The monthly increase was mostly driven by a significant boost in the production of transportation equipment (+3.4% month-on-month), in particular, the production of motorcycles and buses as well as general machinery (+2.4% mom). Offsetting this growth to some extent, electronic and communications equipment weakened. In annual terms, industrial production decelerated from a 3.5% expansion in January to a 2.8% increase in February. As a result of the lower reading, annual average growth continued to slip, down from 14.7% in January to 12.5% in February, mainly reflecting the strong growth observed in the same month of the previous year (February 2010: +31.3% year-on-year). According to a survey conducted before the earthquake, manufacturers expect industrial output to continue rising, expanding 1.4% in March (previously +1.9%) before contracting 1.3% in April.