Industrial output slipped 0.6 percent in July from the previous month, following a 3.2 percent rise in June, according to a preliminary report released Tuesday by the Ministry of International Trade and Industry.
The production index at the nation's factories and mines came to 97.6 for July against a base of 100 for 1995.
Despite the slight deterioration in July, MITI said the situation for industrial production has firmed, continuing the same trend as in the previous month.
Production was down in such sectors as general machinery and other machinery, chemicals and oil products, the report says, citing mobile phones, electronic games and press metallic molds as specific items that contributed to the overall plunge in industrial production.
Noting that manufacturers are groping for a plan for increasing output, the long-term prospect for final demand is no longer gloomy, MITI officials said.
The shipment index for July dropped 1 percent from the previous month to 99.5, due to a slump in chemical and machinery sectors.
Meanwhile, inventory decreased 1.6 percent to 94.9, marking the fifth consecutive monthly decline and the lowest level since February 1991. The inventory-to-shipments ratio also dropped 1.6 percent in July from June to 101.3.
Industrial output is expected to rise 4.7 percent in August and 0.2 percent in September, with transport machinery, electric machinery and general machinery as major contributors, the MITI report said.
Trade Minister Kaoru Yosano told a regular press conference that he believes the production slump in July was temporary and the economy is in a firm state.