Japan’s industrial production rose in October for the first time in four months, as the reopening of Asian factories eased supply constraints for automakers, offering some hope for the export-dependent economy as it slows down. struggling to start a solid recovery.
The increase was lower than market expectations, highlighting the lingering impact of disruptions in the global supply chain. Analysts, however, see signs of an improving outlook.
“Weak production by automakers has put a damper on overall output in Japan over the past three months, but the situation is improving,” said Takeshi Minami, chief economist at the Norinchukin Research Institute.
Factory output rose 1.1% from the previous month in October, according to government data on Wednesday, marking the first increase since June. It compares to a forecast of a 1.8% gain in a Reuters poll of economists and follows a 5.4% drop the month before.
Auto production rose 15.4% month-on-month in October for its first increase in four months thanks to the waning impact of parts shortages in Asia, an official from the Ministry of Economy, Trade and Commerce said. of Industry (METI) during a briefing.
Japanese automakers – which account for 15% of industrial production statistics, according to METI – including Toyota Motor Corp and Honda Motor Co announced earlier this month their intention to return to normal production in December and catch up with the production lost over the next few months.
Manufacturers polled by the government expect production to jump 9.0% in November, led by a 35.8% increase among automakers, followed by a 2.1% gain in December, according to the data.
âWhile production forecasts for other sectors appear optimistic, the production plans of automakers are reliable and solid,â said Minami, attributing it to the lean production processes of automakers that affect a wide variety of industries. parts suppliers.
“And these (plans) for growth are strong,” he said, adding that it will probably still be until early 2022 for companies to compensate for production losses of several months.
Manufacturers ‘plans reflect the mitigated impacts of chip and parts shortages, a government official said, although he warned of risks in companies’ supply chains, including fallout associated with the variant. Omicron from COVID-19.
Separate data released on Tuesday showed Japan’s unemployment rate stood at 2.7% in October, down from the previous month, while an index measuring job availability fell to 1.15 against 1.16 in September.
After a contraction in July-September, economists polled by Reuters expect the world’s third-largest economy to rebound 5.1% on an annualized basis in the current quarter on higher consumption, in part due to the lifting of the state of emergency induced by the pandemic.
The Bank of Japan will hold a rate review meeting on December 16 and 17, during which the central bank is expected to keep its ultra-simple policy unchanged and may decide whether or not to extend pandemic relief loan programs. beyond the current deadline of March 2022.