Industrial production shrank a seasonally adjusted 0.7 percent in September from the previous month’s record high, the government said Monday.
The index of output at mines and factories dropped to 106.0 against the base of 100 for 2000, compared with a revised 106.8 in August, the Ministry of Economy, Trade and Industry said in a preliminary report.
The reading was better than the average market forecast of a 0.9 percent contraction.
Despite the fall, METI left unchanged its assessment of industrial production for the fourth straight month, saying output is “on an upward trend” aided by the sustained economic recovery.
Looking ahead, the ministry said manufacturers forecast a 0.2 percent dip in industrial production in October and a 0.5 percent increase in November.
But private-sector economists were cautious, citing a sharp fall in industrial shipments and consecutive rises in inventories, a sign that companies may cut production in the coming months.
According to the latest report, the index of industrial shipments contracted 2.6 percent to 108.5, down from a revised 111.4, also a record high. The margin of decline was the biggest since June 2002.
The index of industrial inventories rose 1.0 percent to 95.0, up from a revised 94.1 for the second straight month of increase.
Output by automakers and auto parts makers dropped 5.5 percent, and production by general machinery makers, including semiconductor manufacturing equipment makers, fell by 2.2 percent. Output by manufacturers of personal computers and digital cameras slid 4.9 percent.
In contrast, output by steelmakers grew 2.0 percent.
Shipments of automobiles and related parts fell 9.4 percent, while those of personal computers and digital cameras dropped 5.4 percent.
Electronic parts and devices rose 0.8 percent.
Inventories of electronic parts and devices expanded 7.3 percent, and those of chemicals rose 2.0 percent.
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