–METI Survey: Factory Output Likely to Rebound in March, Rise Further in April
–METI Keeps View: Output Has Weakened While Taking One Step Forward, One Step Back
–METI To Keep Watching Effects of Global Growth, Resumed Auto Output
By Max Sato
(MaceNews) – Japan’s industrial production unexpectedly slipped 0.1% on the month in February following an upwardly revised 6.7% plunge in January as the impact of suspended vehicle output over a safety test scandal lingered, preliminary data released Friday by the Ministry of Economy, Trade and Industry showed. The median forecast was a 1.0% gain.
From a year earlier, factory output posted a fourth straight drop, down 3.4% (versus consensus of a 2.8% decline), after a 1.5 percent dip the prior month. Output has also received downward pressures from the powerful New Year’s Day earthquake in the northwestern region of Hokuriku, which reduced electronic parts supply.
The METI’s survey of producers indicated that output is expected to rebound 4.5% in March and rise a further 3.3% in April.
The January slump was caused by suspension of all domestic production by Toyota Motor group firm Daihatsu over a vehicle safety scandal from late December until mid-February, which has had a widespread impact beyond the auto industry. Toyota also suspended shipments of 10 models in late January after its supplier Toyota Industries admitted to cheating on engine testing.
The METI said it will keep a close watch on the effects of global economic growth and resumed automobile production.
The key points from the data:
* Industrial production edged down 0.1% on the month in February on a seasonally adjusted basis, coming in weaker than the median economist forecast of a 1.0% rise (forecasts ranged from a 0.5% drop to a 2.5% gain). It followed a 6.7% plunge (revised up from minus 7.5%) in January, a 1.4% rise in December, a 0.9% dip in November and a 1.3% increase in October.
* Of the 15 industries, 7 posted decreases from the previous month and 8 marked increases. The overall decline was led by the auto sector, which offset gains among chemical firms as well as pulp and paper makers.
* Based on its survey of manufacturers, METI projected that industrial production would rise 4.9% on the month in March (revised up from a 2.0% rise forecast last month) and rise a further 3.3% in April. Adjusting the upward bias in output plans, METI forecast production would rise a solid 4.5% in March.
* From a year earlier, the production index fell 3.4% in February after slipping 1.5% in December, 1.1% in December and 1.6% in November and rising 0.9% in October. The latest figure was below than the median economist forecast of a 2.8% fall (forecasts ranged from 4.3% to 1.8% drops).
* The seasonally adjusted index of industrial production (100 = 2020) stood at 97.9 in February, down from 98.0 in January. It is still above the recent bottom of 87.6 reached in May 2020 but well below 108.8 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.