The output of factories in Japan decreased in November, which clouded the outlook for the export-dependent economy. According to statistics released by the Ministry of Economy, Trade, and Industry (METI) on Thursday, industrial output decreased by 0.9% in November compared to the previous month. The figure was far higher than the median market prediction, which predicted a decrease of 1.6%.
According to an official from the METI, the production of motor vehicles, which has been the driving force behind industrial output, decreased by 2.5% in November compared to the previous month. This decline was attributed to slowdowns in the manufacturing of compact cars and engines. As a result of a lack of demand for semiconductor and integrated-circuit testing equipment, the official stated that the output of electrical machinery and information and communication electronics equipment also decreased by 3.5%.
According to the Ministry of Industry’s study, manufacturers anticipate that their seasonally adjusted production will increase by 6.0% in December and decrease by 7.2% in January. “Seesawing” was the judgment that METI continued to use for the industrial output rate.
“We’ll continue to monitor the impact of the global economic downturn and rising prices,” stated the government representative.
Additionally, according to the official from METI, a production suspension at Toyota Motor’s (7203.T) Daihatsu small vehicle subsidiary owing to a safety issue is anticipated to exert negative pressure on output beginning in January.
This Monday, the firm announced that it will halt production in Japan until the end of the following month. The company specializes in producing compact cars.
Kota Suzuki, an economist at Daiwa Securities, stated that although output connected to automobiles has been slowly recovering this year due to alleviating supply limitations, the danger of production cuts would need to be carefully monitored in the short future.
Regarding the forecast for the manufacturing of semiconductors, the official from METI anticipated a steady rebound.
According to separate figures, retail sales in Japan increased by 5.3% in November compared to the same month a year earlier. This represented the 21st consecutive month of expansion on the market since March 2022, and it was nearly in line with the consensus market prediction for a gain of 5%.
According to the report, retail sales increased by 1.0% in November compared to the previous month, following a fall of 1.7% in October.
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