Japan: Industrial production bounces back from post-quake disruptions
June 28, 2011
The industrial sector continues to rebound from the 11 March earthquake. In May, industrial production grew 5.7% over the previous month in seasonally adjusted terms, following the 1.6% increase tallied in April (previously reported: +1.0% month-on-month). The increase marked the fastest expansion in almost 60 years and came in above expectations, with markets anticipating a 5.5% expansion. Compared to May last year, industrial production slipped 5.9% (April: -13.6% year-on-year). The monthly rebound was mainly supported by a strong rise in production of automobiles and electronic equipment. The transportation industry gained 36.4% over the previous month (April: -1.9% month-on-month), while information and communication electronics equipments expanded 14.0% (April: -16.7% mom). The May report suggests that supply chain disruptions are ending, as industrial production is quickly ramped up again and that the awaited V-shaped recovery is well on track. According to the Survey of Production Forecast released on 28 June, manufacturers are still upbeat and see industrial output expanding 5.3% over the previous month in June (previously expected: +7.7% mom). However, analysts expect industrial production to increase only 0.5% in July amid concerns about potential power shortages in the coming months due to expectations of a hot summer.