–METI Keeps View Output Shows Signs of Pickup As Firms See Rebound in Feb
–METI To Watch Effects of Spread of Pandemic, Parts Shortages, Ukraine
By Max Sato
(MaceNews) – Japan’s industrial production posted the second straight drop in January, slipping after a surge in November, as a spike in Omicron-led coronavirus cases caused some auto factories to suspend operations and supply shortages lingered, preliminary data released Monday by the Ministry of Economy, Trade and Industry showed.
But given higher output projected by manufacturers for February and March, the ministry maintained its assessment, saying output is “showing signs of a pickup.” It upgraded its view in December from its previous statement that output was pausing.
METI said it will keep a close watch on the effects of the pandemic on domestic and global growth as well as parts and materials supply shortages and the development in the Russian invasion of Ukraine.
The key points from the data:
* The decrease was led by lower production of automobiles, steel and petrochemical products, which offset higher output of electronic parts and devices, production machinery and chemical products.
* Production fell during the first wave of the pandemic in 2020. After a pickup later that year, more waves of infections caused logistical bottlenecks amid reopening demand and prompted parts supply delays from Southeast Asia, where lockdowns hit factory operations in August 2021. Later, easing supply bottlenecks pushed up production in October and November.
* The index of industrial production (100 in the 2015 base year) fell to 95.2 in January, the lowest level since 91.1 seen in October 2021. It was above the recent bottom of 77.2 hit in May 2020 but below 99.1 seen in January 2020, when the pandemic hadn’t had a widespread impact yet.
* From a year earlier, the index dipped 0.9% in January after rising 2.7% in December and rebounding 5.1% in November. Production showed double-digit percentage year-on-year gains from April to July 2021 in reaction to the pandemic-depressed activity the previous year.
* Based on its survey of manufacturers, METI projected that industrial production would rise 5.7% on month in February (revised up from a 2.2% rise forecast last month) and edged up 0.1% in March. Adjusting the upward bias in output plans, METI forecast production would rise 0.7% in February.
* Shipments fell 1.8% on month in January, the first fall in four months after edging up 0.1% the previous month. The spike in Covid cases lowered both production and shipments of passenger cars.
* Inventories marked the first drop in five months, down 1.8% on the month after rising 0.1% in December. Lower output of vehicles is believed to have led to lower inventories.