| Consensus | Consensus Range | Actual | Previous | Revised | |
|---|---|---|---|---|---|
| Month over Month | 0.6% | 0.3% to 1.5% | 0.3% | -2.3% | -2.2% |
| Year over Year | -1.0% | -3.2% to 0.2% | -1.1% | -2.8% | -2.7% |
Highlights
Japan's industrial production posted a slight 0.3% rebound on the month in December, propped up by solid real exports, after slumping 2.2% (revised from 2.3%) in November and surging 2.8% in October. The increase (consensus was +0.6) was led by producers of production machinery (chemical equipment and industrial robots) as well as electronic parts and devices (memory chips and liquid crystal displays). Output of vehicles remained depressed.
The Ministry of Economy, Trade and Industry said only five out of the 15 industries recorded gains while nine showed declines and production by one industry was flat. METI's survey of producers indicated that output would slip back 2.1% in January before marking a partial 1.2% rebound in February.
In the October-December quarter, industrial production rebounded 1.3% on quarter after falling 0.3% in July-September, 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 in the January-March period.
Fourth-quarter capital goods shipments (excluding transport equipment) surged 7.3% on quarter after slumping 3.9% in the third quarter, rising 0.5% in the second quarter and falling 2.0% in the first quarter of 2024, indicating business investment in equipment in the Q4 GDP data due on Feb. 17 may show a rebound after dipping 0.1% on quarter in Q3, when economic growth slowed to 0.3% q/q (1.2% annualized) from 0.5% (2.2%) in Q2.
From a year earlier, factory output fell 1.1%, following a 2.7% drop (revised from -2.8%) in November and a 1.4% gain in October. It was largely in line with the consensus call of a 1.0% drop.
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.
The Ministry of Economy, Trade and Industry said only five out of the 15 industries recorded gains while nine showed declines and production by one industry was flat. METI's survey of producers indicated that output would slip back 2.1% in January before marking a partial 1.2% rebound in February.
In the October-December quarter, industrial production rebounded 1.3% on quarter after falling 0.3% in July-September, 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 in the January-March period.
Fourth-quarter capital goods shipments (excluding transport equipment) surged 7.3% on quarter after slumping 3.9% in the third quarter, rising 0.5% in the second quarter and falling 2.0% in the first quarter of 2024, indicating business investment in equipment in the Q4 GDP data due on Feb. 17 may show a rebound after dipping 0.1% on quarter in Q3, when economic growth slowed to 0.3% q/q (1.2% annualized) from 0.5% (2.2%) in Q2.
From a year earlier, factory output fell 1.1%, following a 2.7% drop (revised from -2.8%) in November and a 1.4% gain in October. It was largely in line with the consensus call of a 1.0% drop.
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 post a slight 0.6% rebound on the month in December, propped up by solid real exports, after slumping 2.2% (revised from 2.3%) in November and surging 2.8% in October. The monthly survey by the Ministry of Economy, Trade and Industry released last month indicated that output would dip 0.3% in December despite an expected rise in production and general machinery before rebounding 1.3% in January on vehicles and semiconductors.
From a year earlier, factory output is expected to have fallen 1.0%, following a 2.7% drop (revised from -2.8%) in November and a 1.4% gain in October.
Last month, 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.
From a year earlier, factory output is expected to have fallen 1.0%, following a 2.7% drop (revised from -2.8%) in November and a 1.4% gain in October.
Last month, 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.
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.
