Industrial production rose 1.6% in August

Japan’s industrial production grew a seasonally adjusted 1.6 percent in August from a month earlier, marking the second consecutive monthly gain, the Ministry of Economy, Trade and Industry said Monday in a preliminary report.

The index of output at mines and factories rose to 98.2 — its highest level since 98.8 in May 2001 — against the 1995 base of 100, the ministry said.

“Production is on a gradual upward trend,” METI said, repeating the assessment it has given since June.

While uncertainty lingers over the prospects of an export-driven output recovery, signs of an export downturn have yet to materialize, a ministry official said.

But persistent worries over the U.S. economy and the momentum of electrical machinery output may cast shadows, the official said.

Production of electrical machinery rose 3.5 percent in August from a month earlier — the first upturn in three months — on continued brisk output of liquid crystal devices for digital cameras and cellular phones, METI said, adding that temporary demand for personal computers also played a part.

Output of general machinery gained 6 percent on robust output of stamping dies for automobile assembly and of semiconductor-manufacturing equipment and digital color copiers, mainly for export, it said.

Transportation machinery output climbed 3.6 percent due to brisk car exports to the United States and the launch of new models of compact cars and minivehicles, it said.

The ministry said it expects industrial production to rise 0.4 percent in September and 0.2 percent in October, with gains led by electrical machinery mostly offset by falls in automobile output.

The index of industrial shipments rose 3.3 percent for the first gain in three months to 102.1, its highest level since the 103.5 registered in March 2001.

Shipments were also boosted by large-lot transactions in steam turbines and boilers for use in power plants, the official added.

The index of industrial inventories fell 0.9 percent to 87.3 — its lowest reading since 86.2 in December 1988 — due in part to inventory declines of seasonal items, including air conditioners and refrigerators, the ministry said.