Japan’s industrial output rose 4.0% on month in April

Jun 15, 2017

Industrial production in April rose 4.0 percent from the previous month to its highest level since October 2008, due mainly to increased auto production amid an economic recovery, government data showed Wednesday.

The Ministry of Economy, Trade and Industry, however, kept unchanged its basic assessment that industrial production shows signs of improving. Manufacturers polled in the survey said they expect output to fall 2.5 percent in May but rise 1.8 percent in June.

The seasonally adjusted index of output at factories and mines stood at 103.8 against the base of 100 for 2010, the highest since 107.4 reported in October 2008. It followed a revised 1.9 percent fall in March, the ministry said in a preliminary report.

Noting that the index was at its highest level since plunging following the global financial crisis in 2008 triggered by the collapse of Lehman Brothers, a ministry official said, “Industrial output has been solidly improving overall.”

The April figure also showed the biggest gain since a jump of 4.2 percent registered in June 2011, three months after the Great East Japan Earthquake and tsunami disaster hit.

The outcome, nevertheless, was worse than the median estimate of a 4.5 percent rise.

The biggest contributor to the sharp increase in April was the transport machinery sector, especially the production of passenger cars, minicars and auto equipment.

“Exports of cars have not been at their best due to the recent foreign exchange rates, but domestic production has been robust,” the ministry official said.

On Tuesday, data from Japan’s eight major automakers showed their combined domestic production in April rose 16.9 percent from a year earlier to 708,610 vehicles, helped by Toyota Motor’s brisk production after recovering from disruptions caused by earthquakes in Kyushu last spring.

Government data also showed earlier this month that the economy grew an annualized real 2.2 percent in the January-March period for a fifth straight quarter of expansion, marking the longest period of growth in about 11 years, buoyed by a pickup in private consumption.

Eleven out of 15 business sectors saw industrial production rise. Information and technology as well as paper and pulp sectors were among those that saw output fall.

Yasuhiro Takahashi, senior economist at Nomura Securities, said the April figure is a good start to the April-June quarter, reflecting robust production plans put forward by Japanese companies.

“Even if the data for next month is likely to show a drop as forecasted by the manufacturers’ survey, industrial production is expected to still be solid for the whole of the second quarter” of 2017, Takahashi said.

The ministry official said industrial production for May is likely to decrease because of the closure of shipping services during the Golden Week holidays from late April to early May.

The index of industrial shipments rose 2.7 percent to 101.1 and that of inventories was up 1.5 percent to 111.3.

 

Source: The Japan News