Japan: Industrial output drops for the fourth consecutive month
October 29, 2010
The Japanese recovery is showing signs of faltering. In September, industrial output dropped for the fourth consecutive month, falling a seasonally adjusted 1.9% over the previous month. The reading came in below both the 0.5% contraction registered in August (previously reported: +0.3% month-on-month) and market expectations, which had industrial production decreasing 0.6%.The monthly contraction was broad-based, although mostly driven by a decline in the production of transport equipment as well as in electronic parts and devices. Owing to the weak monthly figure, industrial production decelerated from a 15.1% year-on-year expansion in August to an 11.1% increase in September. Nonetheless, the annual average growth continued to improve from 9.9% in August to 13.1% in September, reflecting mostly the dismal performance of the industrial sector a year ago (September 2009: -17.5% yoy). According to a survey published along with industrial output data, manufacturers expect industrial output will continue to fall, decreasing by 3.6% in October and 1.7% in November.