Japan Industry October 2016


Japan: Industrial production expands for third consecutive month in October

November 30, 2016

In October, Japanese industrial production expanded 0.1% over the previous month in seasonally-adjusted terms, which followed September’s revised 0.6% increase (previously reported: 0.0% month-on-month). October’s print overshot the flat reading that market analysts had expected.

According to the Ministry of Economy, Trade and Industry, the categories that contributed positively to the monthly reading were electronic parts and devices, fabricated metals and transport equipment. On the other hand, general-purpose, production and business-oriented machinery, electrical machinery and chemicals (excluding drugs) dragged on industrial production. Following October’s reading, the government maintained its basic assessment of industrial production, stating that output was, "showing signs of increasing at a moderate pace."

On an annual basis, industrial output fell 1.3% in October, contrasting the previous month’s 1.5% decrease. Annual average growth in industrial production was stable at September’s minus 0.9% in October.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 4.5% increase in November, which was above the 2.1% expansion that was forecast in the previous month’s survey. Manufacturers expect a 0.6% decline in December.

FocusEconomics Consensus Forecast panelists see industrial production falling 0.9% in 2016, which is up 0.1 percentage points from the previous month’s projection. For 2017, the panel expects industrial production to rise 1.6%, which is unchanged from the previous month’s estimate.

Author: Ricard Torné, Lead Economist

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Japan Industry Chart

Japan Industry October 2016

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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