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Japan: Industrial production falls in August

September 30, 2014

In August, industrial production declined 1.5% over the previous month in seasonally-adjusted terms, which contrasted the revised 0.4% increase recorded in July (previously reported: +0.2% month-on-month). The print, however, was well shy of forecasts of an August 0.2% increase.

According to the Ministry of Economy, Trade and Industry, the categories that made the greatest contribution to the monthly contraction were general-purpose, production and business oriented machinery, transport equipment as well as electrical machinery. The government maintained its general assessment, stating that industrial production in Japan is, “on a weaker note.”

On an annual basis, industrial output fell 2.9% in August, which followed the 0.7% decrease tallied in the previous month and marked the lowest rate since June 2013. Annual average growth in industrial production ticked down from 4.5% in July to 4.3% in August.

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 6.0% increase in September, which was above the 3.5% rise that was forecast in the previous month’s survey. In addition, manufacturers expect a 0.2% decline in October.

FocusEconomics Consensus Forecast panelists see industrial production expanding 4.3% in 2014, which is down 0.5 percentage points over the previous month’s projection. In 2015, the panel expects industrial production to rise 2.6%.


Author: Ricard Torné, Lead Economist

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Japan Industry August 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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