TOKYO - Japan’s factory output declined in November, weighed down by falls in auto production and clouding the outlook for the export-reliant economy.
Industrial production fell 0.9 per cent in November from October, data from the Ministry of Economy, Trade and Industry (Meti) showed on Dec 28.
The reading was better than the median market forecast for a 1.6 per cent drop.
Motor vehicle production, which has underpinned industrial output, fell 2.5 per cent in November from October due to slowdowns in the manufacturing of small cars and engines, a Meti official said.
Output of electrical machinery and information and communication electronics equipment also fell 3.5 per cent, due to sluggish demand in semiconductor and integrated-circuit testing equipment, the official said.
Manufacturers surveyed by the ministry expect seasonally adjusted output to increase 6 per cent in December and decline 7.2 per cent in January. Meti maintained its assessment of industrial output as “seesawing”.
“We’ll continue to monitor the impact of the global economic downturn and rising prices,” the official said.
Furthermore, a production halt at Toyota Motor’s small car unit Daihatsu due to a safety scandal is expected to add downward pressure on output from January onward, the Meti official said.
The small car specialist has suspended output in Japan until the end of January, the company said this week.
Daiwa Securities economist Kota Suzuki said: “Automobile-related production has recovered steadily (in 2023) thanks to easing supply constraints, but the risk of production cuts will need to be watched carefully in the near term.”
Regarding the outlook on semiconductor production, the Meti official expected a gradual recovery.
Separate data showed Japanese retail sales expanded 5.3 per cent in November from a year earlier. That was roughly in line with the median market forecast for a 5 per cent gain and marked the 21st consecutive month of expansion since March 2022.
Compared with the previous month, retail sales grew 1 per cent in November, following a 1.7 per cent decline in October, the data showed. REUTERS
