TOKYO: Japan’s industrial output fell 2.1% in February from the previous month, official preliminary data showed on Tuesday, as weaker production in autos, fabricated metals and electronic parts reversed some of January’s strength. The decline matched economists’ median forecast and marked the first monthly drop in three months. On a seasonally adjusted basis, the index of industrial production stood at 102.3, while output was up 0.3% from a year earlier.
The Ministry of Economy, Trade and Industry said shipments fell 1.6% in February from January, while inventories rose 0.3% and the inventory ratio increased 2.3%. The ministry kept its overall assessment unchanged, saying industrial production continued to move unevenly. The February data showed demand remained mixed across manufacturing, with declines spread across major goods-producing industries even as several materials and consumer-related categories posted gains during the month.
Motor vehicles were the largest drag on output, with production in the sector down 3.6% from the previous month. Fabricated metals fell 5.9%, electronic parts and devices dropped 3.1%, transport equipment excluding motor vehicles slid 6.4%, and production machinery declined 1.7%. METI said the weaker reading reflected lower output of small trucks, auto engines, liquid crystal display panels, aircraft parts, industrial robots and machining centers, among other products.
Auto And Electronics Weigh On Production
Areas of growth only partly offset those declines. Output in iron and steel and non-ferrous metals rose 2.3% from the previous month, while chemicals excluding inorganic and organic chemicals and pharmaceuticals increased 1.3%. Pulp, paper and paper products advanced 1.6%. METI identified optical-fiber cable products, electrolytic copper, cosmetics, detergents, coated printing paper and corrugated base paper among the items that supported production in February.
The production report underscored a split picture across factory activity. Shipments fell after gains in some transport-related goods were outweighed by declines in electronic parts, chemicals and petroleum and coal products. Inventories edged higher, led by iron and steel and non-ferrous metals, production machinery and petroleum and coal products, while stocks of motor vehicles, chemicals and fabricated metals declined. The inventory ratio stood at 103.5 on a seasonally adjusted basis.
Manufacturers Project Near-Term Rebound
Despite the February setback, manufacturers surveyed by METI projected a recovery in the next two months. The ministry’s survey of production plans showed seasonally adjusted output is expected to rise 3.8% in March and a further 3.3% in April. The strongest expected contributions for March were from production machinery, electrical machinery and information and communication electronics equipment, and electronic parts and devices, according to the forecast table.
For April, METI said the biggest expected gains would come from production machinery, electrical machinery and information and communication electronics equipment, and general-purpose and business-oriented machinery. The official outlook left the ministry’s baseline assessment unchanged after February’s fall, with production described as fluctuating indecisively. The data showed Japan’s factory sector ended February softer than the month before but still slightly above year-earlier levels. – By Content Syndication Services.