Japan’s industrial production rose a seasonally adjusted 1.3 percent in February, the government reported Friday.
The report prompted Heizo Takenaka, economic and fiscal policy minister, to indicate that the government may leave its economic assessment unchanged in a monthly report to be published in mid-April.
“Industrial production data were broadly in line with our expectations,” Takenaka told a news conference.
The industrial production figure is a key indicator used to compile the monthly economic report.
The index of output at mines and factories came to 92.2 against the 1995 base of 100, after declining 1.5 percent in January, the Ministry of Economy, Trade and Industry said in a preliminary report.
The ministry revised upward its assessment, saying output is showing a tendency to stall. After downgrading its view in July, it had until January said production “continues to be on the decline.”
“Production tends to be stalling and although inventory adjustments are progressing, moves of final demand remain uncertain and future moves need to be carefully watched,” METI said.
A ministry official said the trend of output is changing because the margin of decline has tended to shrink and positive moves have appeared recently.
But he noted: “There is still no factor indicating output is going to hit bottom and turn upward. Nothing guarantees it will not fall again.”
The ministry said it expects manufacturing to rise 1 percent in March, due in part to an estimated 5.5 percent growth in production of electrical machinery, and to edge up 0.2 percent in April.
The index of industrial shipments gained 1.4 percent to 95, also following a 1.3 dip in the preceding month, while the index of industrial inventories lost 0.6 percent to 92.1, down for the sixth consecutive month.
Inventories fell 5.5 percent compared with a year earlier, with the margin of decline widening since it fell in November. The ratio of inventories to shipments inched down 0.1 percent from the previous month to 109.4, falling for the second month in a row.
Electrical machinery and chemicals contributed most to the February output growth, METI said. Electrical machinery makers’ output rose 1.5 percent from January, thanks in part to video cameras, while chemical makers’ production gained 3.1 percent due to synthetic detergent and plastics, according to the ministry.
Chemical makers also helped buoy the shipment index, with their shipments up 4.1 percent, followed by general machinery makers and transportation equipment makers, whose shipments rose 2.7 percent and 1.3 percent, respectively. Transportation equipment was lifted by brisk sales of cars, METI said.
Inventories fell on a 2.7 percent drop at steelmakers, a 1.1 percent dip at electrical machinery makers, a 1.4 percent fall at general machinery makers and a 1.4 percent decline at transportation equipment makers, it said.
Households pinch yen
Spending by wage-earning households fell 2.9 percent in February from a year earlier in real terms after rising 0.2 percent in January, the government said in a preliminary report released Friday.
Average monthly spending by wage-earning households totaled 299,535 yen, according to the Public Management, Home Affairs, and Posts and Telecommunications Ministry.
Reflecting milder-than-usual winter weather, spending on clothes and footwear fell 2.7 percent, while outlays on gas, electricity and water decreased 3.3 percent, a ministry official said.
Citing recent spending fluctuations among households, the official said the “recovery trend is not strong.”
Spending by these households fell 4.4 percent in December after rising 3.6 percent in November.
Household spending accounts for about 60 percent of Japan’s gross domestic product, while wage-earning households make up some 60 percent of all household spending.
Housing outlays dropped 9.2 percent, while communication and transport spending fell 10.3 percent, reflecting fewer car purchases, the ministry said.
Spending on education plunged 17.2 percent.
In contrast, spending on food edged up 0.8 percent, rising for the third consecutive month, with buying fueled by a drop in perishable food prices, the ministry said.
Spending on furniture and other household items increased 3.4 percent, up for the first time in four months.
The average monthly income of these households increased 2.1 percent in real terms to 476,171 yen, rising for the second consecutive month.
The incomes of the main breadwinners rose 2 percent while that of spouses rose 5.1 percent.
Disposable income rose a real 1.6 percent to 399,449 yen.
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