Japan Industry June 2016

Japan

Japan: Industrial production rebounds in June

July 29, 2016

In June, industrial production rose 1.9% over the previous month in seasonally-adjusted terms, which contrasted May’s 2.6% drop (previously reported: -2.3% month-on-month). June’s print exceeded the 0.5% expansion that market analysts had expected.

According to the Ministry of Economy, Trade and Industry, the categories that contributed the most to the monthly increase were chemicals (excluding drugs), transport equipment and fabricated metals. As a result of June’s rebound, the government upgraded 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 1.9% in June, which followed the 0.4% decrease tallied in the previous month. Annual average growth in industrial production declined from minus 1.0% in May to minus 1.3% in June, which marked a five-month low.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 2.4% increase in July, which exceeded the 1.3% increase that was forecast in the previous month’s survey. Manufacturers expect a 2.3% expansion in August.

FocusEconomics Consensus Forecast panelists see industrial production falling 1.1% in 2016, which is down 0.4 percentage points over last month’s projection. For 2017, the panel expects industrial production to rise 1.7%.


Author: Ricard Torné, Lead Economist

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Japan Industry June 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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