Japan Industry

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Japan: Industrial production records largest drop in nearly four years in February

March 30, 2015

In February, industrial production declined 3.4% over the previous month in seasonally-adjusted terms, which contrasted the revised 3.8% increase recorded in January (previously reported: +4.0% month-on-month). The print exceeded the 1.9% contraction that market analysts had expected and represented the largest decline since March 2011.

According to the Ministry of Economy, Trade and Industry, the categories that made the greatest contributions to the monthly fall were machinery, transport equipment and electronic parts and devices. Despite February’s disappointing performance, the government maintained its general assessment of industrial production, stating that “recovering moderately”.

On an annual basis, industrial output fell 2.6% in February, which followed the 2.8% decrease tallied in the previous month. As a result, annual average growth in industrial production ticked down from 1.0% in January to 0.2% in February.

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 2.0% decline in March, which is above the 3.2% drop that was forecast in the previous month’s survey. Manufacturers expect a 3.6% expansion in April.

FocusEconomics Consensus Forecast panelists see industrial production expanding 2.4% in 2015, which is up 0.4 percentage points over the previous month’s projection. In 2016, the panel expects industrial production to rise 2.5%.


Author: Ricard Torné, Lead Economist

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Japan Industry Chart


Japan Industry February 2015 0

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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