Japan: Industrial production rebounds in October
November 30, 2011
In October, industrial production expanded 2.2% over the previous month in seasonally adjusted terms, which contrasted the revised 3.3% drop observed in September (previously reported: -4.0% month-on-month). The print more than doubled the market projection of a 1.1% rise. On an annual basis, industrial production rose a paltry 0.4% in October, which, nevertheless, reversed the 3.3% drop recorded in the previous month. The monthly increase was mainly driven by strong gains in transport equipment and general machinery, as well as in electrical machinery. In particular, manufacturers ramped up production of vehicles. On the downside, the electronic parts and devices category dropped still further. Industrial activity rebounded in October despite the European debt crisis and the floods in Thailand. However, according to analysts, industrial output will probably slow in the months ahead as overseas demand cools and the effects of the Thai floods has yet to be fully factored in. According to the Survey of Production Forecast, manufacturers are less upbeat and see industrial output declining 0.1% in November, which is down from the 1.8% expansion expected in the previous month's survey. A 2.7% increase is expected in December.