–METI Survey: Output Likely to Rise in October, Slip Back in November
–Core Capital Goods Shipments Dip in July-September, Indicating Weak Capex in Q3 GDP Data
–METI Keeps View: Output Taking One Step Forward, One Step Back
–METI To Watch Effects of Downside Risks to Global Growth, Inflation
By Max Sato
(MaceNews) – Japan’s industrial production posted its first rise in three months in September but at a much weaker-than-expected pace of 0.2%, as output of automobiles returned to normal after a temporary shutdown at Toyota Motor’s domestic factories in late August, preliminary data released Tuesday by the Ministry of Economy, Trade and Industry showed.
Slowing global demand took its toll on the July-September output, which gave up nearly all the gain in April-June. From a year earlier, factory output marked the third consecutive fall in September, down 4.6%, which was worse than expected.
The METI’s survey of producers indicated that output is expected to post a modest gain in October before falling back in November.
The METI said it will keep a close watch on the effects of downside risks to global economic growth and a rise in prices.
The key points from the data:
* Of the 15 industries, nine posted increases from the previous month and six. marked decreases. The increase was led by higher output of passenger cars and auto parts as well as general machinery and cement. Lower production was seen in production machinery (industrial robots, etc.) and electrical and information technology equipment (ultrasound and x-ray devices).
* Production fell a seasonally adjusted 1.3% on quarter in the July-September period after rising 1.4% in April-June, falling 1.8% in January-March and slipping 1.7% in October-December. The median economist forecast was a 0.6% drop.
* Based on its survey of manufacturers, METI projected that industrial production would rise 3.9% on the month in October (revised up slightly from a 3.8% rise forecast last month) and fall 2.8% in November. Adjusting the upward bias in output plans, however, METI forecast production would still rise 1.1% in October.
* From a year earlier, the production index slipped 4.6% in September after falling a revised 4.4% in August, dipping 2.3% in July and being flat in June. The decrease was much larger than the median economist forecast of a 2.6% fall (forecasts ranged from 3.6% to 2.3% drops).
* Shipments of capital goods excluding transport equipment — a key indicator of business investment in equipment in GDP data — fell 4.2% on quarter in July-September after rebounding 3.8% in April-June, slumping 6.5% in January-March, falling 5.1% in October-December. Capital investment may remain sluggish in the preliminary July-September GDP data due on Nov. 15, which is expected to show the economy contracted slightly after strong gains in the previous two quarters.
* The index of industrial production (100 = 2020) stood at 103.3 in September, up from a revised 103.1 in August. It is well above the recent bottom of 87.6 hit in May 2020 but below 108.8 seen in January 2020, when the pandemic hadn’t had a widespread impact yet. The index briefly jumped to 108.8 in April 2021, 109.0 in June 2021 and 107.8 in August 2022.