JP: All Industry Index


Wed Jul 19 23:30:00 CDT 2017

Actual Previous
Month over Month -0.9% 2.1%
Year over Year 2.4% 2.5%

Highlights
Japan's All Industry Index fell to a seasonally adjusted level of 104.7 in May, down 0.9 percent on the month. This index has alternated between monthly increases and decreases since the start of the year with only a modest net gain over this period.

Today's data suggest activity weakened in all three major sectors of the economy in May. The index of construction industry activity, which accounts for around 6 percent of the total index, fell 1.0 percent on the month after a strong increase in April. The index of industrial production, accounting for around 21 percent of the total index, also partly reversed the increase recorded in April, falling by 3.6 percent on the month in May and making the biggest contribution to the fall in the headline index. Finally, the index of tertiary industry activity, accounting for around 73 percent of the total index, fell a slight 0.1 percent on the month after a solid gain in April.

In year-on-year terms, the seasonally adjusted index advanced 2.4 percent in May after an increase of 2.7 percent in April. Using unadjusted data, the index rose 3.0 percent on the year in May, accelerating from 2.1 percent in April.

Earlier today, officials at the Bank of Japan upgraded their assessment of economic conditions, arguing that the economy is "expanding moderately". Their median forecast for real GDP growth has been revised from 1.6 percent to 1.8 percent for the fiscal year starting April 2017, from 1.3 percent to 1.4 percent for the fiscal year starting April 2018, and left unchanged at 0.7 percent for the fiscal year starting April 2019.

Definition
The All Industry Index takes a reading of activity in the tertiary index combined with activity in the construction, agricultural and fisheries industries, the public sector and industrial output. This index is considered a close approximation for gross domestic product growth as measured by industrial and service sector output.

Description
The all industry index evaluates the monthly change in overall production by all sectors of the Japanese economy. The index includes the tertiary index which is released a few days before the all industry plus the construction, agricultural and fisheries industries, the public sector and industrial output. The index closely follows Japanese GDP and overall growth figures, providing insight into current levels of Japanese economic expansion.