–METI Survey: Output Likely to Fall in November, Rise in December
–METI Keeps View: Output Taking One Step Forward, One Step Back
–METI Repeats: To Watch Effects of Downside Risks to Global Growth, Rise in Inflation
By Max Sato
(MaceNews) – Japan’s industrial production made a solid start to the final quarter of 2023, posting its second straight rise on the month in October, up an above-forecast 1.0%, as output of electronic parts and devices rebounded after a recent slip and demand for automobiles remains strong on improved supply chains, preliminary data released Thursday by the Ministry of Economy, Trade and Industry showed.
Production weathered the impact of a temporary shutdown at some of Toyota Motor’s domestic factories caused by an accident at a supplier’s facility. The data also reflects the general assessment that the global semiconductor market has hit a bottom.
From a year earlier, factory output marked its first rise in five months, up 0.9%, reversing only a small portion of recent drops including a 4.4% decline in each of September and August.
The METI’s survey of producers indicated that output is expected to fall in November, giving up all of the gains made in the previous two months, before rebounding in December.
The METI repeated its recent statement that 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:
* Industrial production rose 1.0% on the month in October on a seasonally adjusted basis, coming in stronger than the median economist forecast of a 0.5% rise (forecasts ranged from a 1.5% drop to a 1.6% gain). It followed a 0.5% rise (revised up from a 0.2% gain) in September, a 0.7% drop in August, a 1.8% fall in July, a 2.4% rise in June and a 2.2% slump in May.
* Of the 15 industries, 10 posted increases from the previous month and five marked decreases. The increase was led by higher output of electronic parts and devices after a recent decline. Passenger cars and trucks also contributed to the overall production rise, reflecting strong sales of those vehicles. Lower production was seen in the category of iron/steel and non-ferrous metals as well as oil refineries.
* Based on its survey of manufacturers, METI projected that industrial production would dip 0.3% on the month in November (revised up from a 2.8% drop forecast last month) and rebound 3.2% in December. Adjusting the upward bias in output plans, METI forecast production would fall a sharper 1.9% in November.
* From a year earlier, the production index rebounded a modest 0.9% in October after falling 4.4% each in September and August, dipping 2.3% in July, being flat in June and rising 4.2% in May. The increase was much larger than the median economist forecast of a 0.2% rise (forecasts ranged from a 1.3% drop % to a 1.5% rise).
* The seasonally adjusted index of industrial production (100 = 2020) stood at a four-month high of 104.6 in October, up from a revised 103.6 in September. 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.