Japan Industry

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Japan: Industrial production rebounds in May

June 30, 2014

In May, industrial production expanded 0.5% over the previous month in seasonally-adjusted terms, which contrasted the revised 2.8% drop recorded in April (previously reported: -2.5% month-on-month), yet came in shy of the 0.9% increase that markets had expected.

According to the Ministry of Economy, Trade and Industry, the sectors that made the greatest contribution to the monthly rise were transport equipment, textiles and electronic parts and devices. The government maintained its general assessment, stating that industrial production in Japan, “appears to be flat.”

On an annual basis, industrial output expanded 0.8% in May, which was well below the 3.8% increase tallied in the previous month. Nevertheless, annual average growth in industrial production rose from 3.8% in April to 4.0% in May, marking the highest level since May 2011.

Meanwhile, the Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 0.7% drop in June, which was above the 2.0% contraction that was forecast in the previous month’s survey. Conversely, manufacturers expect a 1.5% expansion in July.

FocusEconomics Consensus Forecast panelists see industrial production expanding 5.0% in 2014, which is up 0.3 percentage points over the previous month’s projection. In 2015, the panel expects industrial production to rise 3.1%.


Author: Ricard Torné, Lead Economist

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Japan Industry May 2014

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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