Japan: Industrial production dips in November on the back of Thai floods
December 28, 2011
In November, industrial production eased 2.6% over the previous month in seasonally adjusted terms, which contrasted the revised 2.2% expansion observed in October. The print surprised on the downside as the market was expecting output to fall only 0.8%. On an annual basis, industrial production contracted 4.0% (October: +0.1% year-on-year), which represents the sharpest decline in six months. The monthly contraction was mainly driven by a sharp fall in transport equipment and information and communication equipment, while general machinery declined slightly. Industrial activity in November was severely hit by disruptions in the industrial parts supply chain following the floods which affected Thailand in October. In addition, a strengthening yen and cooling global demand also took its toll on output. The Ministry of Economy, Trade and Industry stated that the trend of industrial output in general appears to be "flat." According to the Survey of Production Forecast, manufacturers are more upbeat and see industrial output rebounding 4.8% in December, which is up from the 2.7% expansion expected in the previous month's survey, and to rise to 3.4% in January.