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Japan: Industrial production in August drops for second consecutive month

September 30, 2015

In August, industrial production declined 0.5% over the previous month in seasonally-adjusted terms, which followed the revised 0.8% decrease recorded in July (previously reported: -0.6% month-on-month). August’s print, surprisingly, contrasted the 1.0% rise that market analysts had expected and represented the second consecutive drop.

According to the Ministry of Economy, Trade and Industry, the categories that made the greatest contributions to the monthly drop were general-purpose, production and business oriented machinery, electronic machinery as well as transport equipment. As a result of August’s drop, the government downgraded its basic assessment of industrial production, stating that output has weakened.

On an annual basis, industrial output rose 0.2% in August, which was above the flat reading tallied in the previous month. Annual average growth in industrial production inched up from minus 1.2% in July to minus 0.9% in August.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 0.1% expansion in September, which contrasted the 1.7% drop that was forecast in the previous month’s survey. Manufacturers expect a 4.4% expansion in October.

FocusEconomics Consensus Forecast panelists see industrial production expanding 0.5% in 2015, which is down 0.3 percentage points over the previous month’s projection. In 2016, the panel expects industrial production to rise 2.1%.


Author: Ricard Torné, Head of Economic Research

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Japan Industry August 2015

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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