Japan: Industrial production falls in May
June 29, 2018
Industrial production contracted 0.2% on a month-on-month and seasonally-adjusted basis in May, contrasting April’s revised 0.5% increase (previously reported: +0.3% month-on-month). May’s decline was smaller, however, than market expectations of a 1.1% drop.
The categories that drove the month-on-month contraction were transport equipment, iron and steel, and electrical machinery. Weaker output was partially offset by gains in the manufacture of electronic parts and devices, general-purpose production and business oriented machinery, and information and communication electronics equipment.
On an annual basis, industrial output grew 4.2% in May, accelerating from the revised 2.6% expansion registered in April (previously reported: +2.5% year-on-year). Annual average growth in industrial production ticked down to a nine-month low of 3.7% in May from 3.8% in April.
The Survey of Production Forecast showed that manufacturers were slightly more optimistic in June. They expected industrial production to have expanded 0.4% in the month, contrasting the 0.8% decrease forecast in the previous survey. Moreover, manufacturers expect industrial output to increase 0.8% in July.
Author: Lindsey Ice, Economist