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Japan: Industrial production moderates at the outset of the year

February 28, 2013

In January, industrial production rose 1.0% over the previous month in seasonally adjusted terms. The reading followed the 2.4% increase observed in December but fell short of the 1.5% expansion expected by the market.

According to the Ministry of Economy, Trade and Industry, the sectors that contributed the most to the monthly rise were transport equipment, iron and steel production as well as information and communication electronics equipment. Building on the second straight monthly rise, the government upgraded its assessment on Japan's industrial production, stating that "output has bottomed out with upticks seen in some segments of the economy."

On an annual basis, industrial production declined 5.1% in January, following the 7.9% decrease witnessed in December. As a result, the trend continues to point downwards, with annual average growth in industrial production falling from minus 0.3% in December to minus 0.6% in January.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic and now see industrial output rising 5.3% month-on-month in February, which is above the 2.3% increase expected in the previous month's survey. Moreover, manufacturers forecast a 0.3% rise in March.

FocusEconomics Consensus Forecast panellists see industrial production expanding 0.2% in 2013, which is up 0.1 percentage points over the previous month's projection. In 2014, the panel expect industrial production to rise 3.3%.


Author: Ricard Torné, Head of Economic Research

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Japan Industry January 2013

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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