Japan: Industrial production flattens in July
August 31, 2016
In July, industrial production was flat over the previous month in seasonally-adjusted terms, which followed June’s 2.3% increase (previously reported: +1.9% month-on-month). July’s print undershot the 0.7% expansion that market analysts had expected.
According to the Ministry of Economy, Trade and Industry, the categories that contributed positively to the monthly reading were transport equipment, electronic parts and devices and electrical machinery. On the other hand, chemicals (excluding drugs), fabricated metals and general-purpose, production and business oriented machinery dragged on industrial production. As a result of July’s reading, the government maintained its basic assessment of industrial production, stating that output was, "moving sideways without a clear direction but showing signs of recovery in some areas."
On an annual basis, industrial output fell 3.8% in July, following the previous month’s 1.5% decrease. Annual average growth in industrial production declined from minus 1.3% in June to a nearly three-year low of minus 1.5% in July.
The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 4.1% increase in August, which exceeded the 2.3% increase that was forecast in the previous month’s survey. Manufacturers expect a 0.7% contraction in September.