Japan Industry March 2016


Japan: Industrial production in March recovers strongly and hit a nearly-five-year high

April 28, 2016

In March, industrial production jumped 3.6% over the previous month in seasonally-adjusted terms, which contrasted the revised 5.2% decrease tallied in March (previously reported: -6.2% year-on-year). February’s print exceeded the 2.8% expansion that market analysts had expected and represented the highest print since June 2011. Nevertheless, the jump in industrial production partially reflects a seasonal effect stemming from the Lunar New Year holidays and compensates for February’s multi-year low

According to the Ministry of Economy, Trade and Industry, the categories that made the greatest contributions to the monthly increase were transport equipment, general-purpose, production and business oriented machinery as well as fabricated metals. As a result, the government maintained its basic assessment of industrial production, stating that output was "moving sideways."

On an annual basis, industrial output rose 0.1% in March, which contrasted the 1.2% decrease tallied in the previous month. Annual average growth in industrial production inched up from minus 1.2% in February to minus 1.0% in March.

The Survey of Production Forecast showed that manufacturers are becoming less optimistic. They now expect industrial output to have recorded a month-on-month 2.6% increase in April, which was worse than the 5.7% rise that was forecast in the previous month’s survey. Manufacturers expect a 2.3% decrease in May.

FocusEconomics Consensus Forecast panelists see industrial production expanding 0.5% in 2016, which is down 0.1 percentage points over the previous month’s projection. For 2017, the panel expects industrial production to rise 1.6%.

Author: Ricard Torné, Lead Economist

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Japan Industry Chart

Japan Industry March 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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