Author: Tronserve admin
Saturday 18th September 2021 01:20 AM
Japan's Industrial Output Hits Fresh 7-Year Low In May
TOKYO (Kyodo) -- Japan's industrial output fell to the lowest level in at least seven years in May as the coronavirus pandemic continued to deal a blow to overseas and domestic demand and disrupted supply chains, government data showed Tuesday.
The seasonally adjusted index of production at factories and mines dropped 8.4 percent from the previous month to 79.1 against the 2015 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report. It was the lowest reading since comparable data became available in January 2013. The world's third-largest economy has been battered by the virus outbreak, with people asked to stay home and many businesses temporarily closing after Prime Minister Shinzo Abe declared a nationwide state of emergency in mid-April.
The ministry maintained its assessment that output is "rapidly declining" following four consecutive months of decrease, including a revised 9.8 percent fall in April. Automakers were the largest contributors to May's weak reading, with production of vehicles and auto parts dropping 23.2 percent from the previous month. Manufacturers of production machinery as well as steelmakers also saw significant declines.
Based on a poll of manufacturers, output is forecast to increase 5.7 percent in June and rise 9.2 percent in July. But a ministry official warned against being overly optimistic, especially as many parts of the world have yet to bring the coronavirus under control. "These projections tend to skew positive. It's hard to imagine that production will rebound firmly soon," the official told a press briefing.
Takeshi Minami, chief economist at the Norinchukin Research Institute, said the economic impact of the pandemic could extend past fall into the second half of the fiscal year. "If weakness in the level of demand continues, more and more businesses that take a hit to their earnings could go bankrupt or begin cutting their workforce," he said.
The May index of industrial shipments dropped 8.4 percent to 77.2, while that of inventories fell 2.5 percent to 103.4.