Japan Industry January 2016


Japan: Industrial production rebounds strongly in January

February 29, 2016

In January, industrial production rose 3.7% over the previous month in seasonally-adjusted terms, which contrasted the revised 1.7% drop tallied in December (previously reported: -1.4% month-on-month). January’s print beat the 3.2% rise that market analysts had expected and represented a 12-month high. Nevertheless, the surge in industrial production partially reflects a seasonal effect stemming from the Lunar New Year holidays.

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

On an annual basis, industrial output fell 3.8% in January, which followed the 1.9% decrease tallied in the previous month. Annual average growth in industrial production inched down from minus 0.9% in December to minus 1.0% in January.

The Survey of Production Forecast showed that manufacturers are becoming more optimistic. They now expect industrial output to have recorded a month-on-month 4.1% drop in February, which was better than the 5.2% decrease that was forecast in the previous month’s survey. Manufacturers expect a 3.1% increase in March.

FocusEconomics Consensus Forecast panelists see industrial production expanding 1.2% 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 January 2016 1

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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