Industrial production fell a seasonally adjusted 0.5 percent in August, marking a first monthly drop in two months, the Ministry of Economy, Trade and Industry said Tuesday.

The index of output at mines and factories registered 93.4 against the 2000 base of 100, METI said in a preliminary report.

Production of general machinery declined 3.5 percent in August, following a jump in output of boiler parts and mechanical presses in June and July, it said.

Output of aluminum cans for beverages contracted as a result of the cooler-than-average summer, a METI official said.

The transport equipment sector led the way, marking a 1.8 percent increase in output, boosted by exports of cars to Europe and the Middle East, the official said.

Production in the electronic parts and devices sector rose 4.9 percent amid robust sales of mobile phones and DVD players and recorders, he said.

Despite the overall decline, METI said production at mines and factories was unchanged, mirroring its assessment for the previous month.

The index of industrial shipments rose 0.5 percent to 95.8, marking a first rise in three months.

The index of industrial inventories slipped 1 percent to 90.7, marking a first decline in two months.

The ministry expects industrial production to grow 2.7 percent in September amid brisk output in the electronic parts and devices sector and the introduction of new car models.

Spending back up

Spending by wage-earning households rose a real 2.2 percent in August from a year earlier for the first increase in two months, the government said Tuesday.

Spending had contracted 6 percent in July on a year-on-year basis.

Average monthly spending by these households came to 328,498 yen, the Public Management, Home Affairs, Posts and Telecommunications Ministry said in a preliminary report.

Their average monthly income fell 2.1 percent in real terms to 474,041 yen, falling for a 17th consecutive month.

Disposable income fell a real 0.5 percent to 405,063 yen, declining for a third straight month.

Personal spending accounts for about 60 percent of gross domestic product, while wage-earning households’ outlays make up 60 percent of total household spending.

The ministry cited an increase in spending on housing improvements as one of the largest factors behind the increase in overall spending.

“A substantial rise in spending on housing renovations contributed to around half of the 2.2 percent increase,” said Masato Aida, head of the ministry’s Consumer Statistics Division.

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