| Consensus | Consensus Range | Actual | Previous | |
|---|---|---|---|---|
| Month over Month | 0.8% | 0.2% to 3.0% | 1.4% | -3.3% |
| Year over Year | -3.7% | -4.0% to -1.3% | -2.8% | -4.9% |
Highlights
Japan's industrial production rebounded a modest 1.4% on the month in September, coming in firmer than the median economist forecast of a 0.8% gain and following a 3.3% slump in August and a 3.1% rise in July. The increase was in line with a rebound in real exports and due largely to the auto industry as Toyota Motor had resumed output of some models suspended earlier amid a false safety record scandal.
METI said 10 out of the 15 industries showed gains, led by passenger cars, chemicals (phenol, polyethylene) and air conditioners whose demand remained strong amid the protracted heat wave that scorched many parts of Japan.
METI's survey of producers indicated that output is expected to rise a solid 5.1% in October, led by manufacturers of production machinery and transport equipment, before falling 3.7% in November on expected lower production of production machinery and semiconductors.
In the July-September quarter, industrial production fell 0.4% on quarter after rising 2.7% in April-June and plunging 5.2% in January-March. In the first two months of the year, suspended output at Toyota group firms over a safety test scandal triggered a widespread slump beyond the auto industry, hurting consumption and business investment and leading to the first GDP contraction in two quarters.
Third-quarter capital goods shipments (excluding transport equipment) slumped 3.9% on quarter after rising 0.5% in the second quarter and falling 2.0% in the first quarter, indicating business investment in equipment in the Q3 GDP data due on Nov. 15 may be sluggish.
From a year earlier, factory output fell 2.8%, smaller than the consensus call of a 3.4% drop and following a deeper-than-expected 4.9% slump in August and a 2.9% rebound in July.
The ministry maintained its assessment, saying industrial output is"taking one step forward and one step back." It said it will keep a close watch on how global economic growth evolves.
METI said 10 out of the 15 industries showed gains, led by passenger cars, chemicals (phenol, polyethylene) and air conditioners whose demand remained strong amid the protracted heat wave that scorched many parts of Japan.
METI's survey of producers indicated that output is expected to rise a solid 5.1% in October, led by manufacturers of production machinery and transport equipment, before falling 3.7% in November on expected lower production of production machinery and semiconductors.
In the July-September quarter, industrial production fell 0.4% on quarter after rising 2.7% in April-June and plunging 5.2% in January-March. In the first two months of the year, suspended output at Toyota group firms over a safety test scandal triggered a widespread slump beyond the auto industry, hurting consumption and business investment and leading to the first GDP contraction in two quarters.
Third-quarter capital goods shipments (excluding transport equipment) slumped 3.9% on quarter after rising 0.5% in the second quarter and falling 2.0% in the first quarter, indicating business investment in equipment in the Q3 GDP data due on Nov. 15 may be sluggish.
From a year earlier, factory output fell 2.8%, smaller than the consensus call of a 3.4% drop and following a deeper-than-expected 4.9% slump in August and a 2.9% rebound in July.
The ministry maintained its assessment, saying industrial output is"taking one step forward and one step back." It said it will keep a close watch on how global economic growth evolves.
Market Consensus Before Announcement
Japan's industrial production is forecast to rebound a modest 0.8% on the month in September in line with a pickup in real exports after plunging 3.3% in August and rising 3.1% in July. Toyota Motor resumed output of some models suspended earlier amid a false safety record scandal. Global demand for semiconductors also remains solid. METI's survey of producers indicated that output is expected to edge up 0.3% in September before rising a further 2.0% in October.
From a year earlier, factory output is expected to post a second straight decline, down 3.7% after falling a deeper-than-expected 4.9% slump in August.
Last month, the ministry maintained its assessment, saying industrial output is"taking one step forward and one step back" after upgrading it in the prior month. It said it will keep a close watch on how global economic growth will evolve.
From a year earlier, factory output is expected to post a second straight decline, down 3.7% after falling a deeper-than-expected 4.9% slump in August.
Last month, the ministry maintained its assessment, saying industrial output is"taking one step forward and one step back" after upgrading it in the prior month. It said it will keep a close watch on how global economic growth will evolve.
Definition
Industrial Production measures the physical output of the nation's factories, mines and utilities. Factories manufacture various products, and the industrial production indexes have been prepared as a comprehensive indicator of wide-ranging production activities for such products and are regarded as some of the most important among economic indexes.
Description
Investors want to keep their finger on the pulse of the economy because it usually dictates how various types of investments will perform. The stock market likes to see healthy economic growth because that translates to higher corporate profits. The bond market prefers more subdued growth that won't lead to inflationary pressures. By tracking economic data such as industrial production, investors will know what the economic backdrop is for these markets and their portfolios.
Industrial production provides key industry data for this export-dependent economy. The data are issued twice a month-a preliminary estimate at the end of the month for the preceding month and a revised estimate about two weeks later. All products, whether sold domestically or abroad, are included in the calculation of industrial production. Industrial production is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
Industrial production provides key industry data for this export-dependent economy. The data are issued twice a month-a preliminary estimate at the end of the month for the preceding month and a revised estimate about two weeks later. All products, whether sold domestically or abroad, are included in the calculation of industrial production. Industrial production is highly sensitive to the business cycle and can often predict future changes in employment, earnings and income. For these reasons industrial production is considered a reliable leading indicator that conveys information about the overall health of the economy. This report has a big influence on market behavior. In any given month, one can see whether capital goods or consumer goods are growing more rapidly. Are manufacturers still producing construction supplies and other materials? This detailed report shows which sectors of the economy are growing and which are not.
