Industrial production in February rose a seasonally adjusted 0.4 percent from the previous month for the fourth straight month of gain, aided by solid demand for cars in and outside the country, the Ministry of Economy, Trade and Industry said Wednesday.
But prospects are bleak as the March data will include the impact of the March 11 earthquake and tsunami, with some analysts expecting production to log a sharper drop than during the 2008 global financial crisis.
METI maintained its basic assessment of production, saying output “continues to show an upward movement.”
But it also said “it will be necessary to keep a watch on the impact” of the disaster.
The disaster forced Toyota Motor Corp. and other major automakers to suspend factory operations due to difficulties in securing parts.
“Even that one factor would likely exert quite a large downward pressure,” said Yusuke Ichikawa, an economist at Mizuho Research Institute.
“I wouldn’t be surprised if the drop were larger than that after the Lehman shock,” he said, noting the research institute projects the index of output at factories and mines to decline by around 10 percent in March.
The index logged an 8.6 percent decrease in February 2009 in the midst of the global financial crisis triggered by the bankruptcy of U.S. investment bank Lehman Brothers in September 2008.
According to METI’s preliminary report on industrial production in February, the index stood at 96.4 against the base of 100 for 2005. The average market forecast was a 0.1 percent fall.
By sector, output by makers of transport equipment, including cars, increased 3.4 percent, up for the fourth consecutive month.
Production by general machinery makers rose 2.4 percent.
Meanwhile, output of information and communications equipment, including liquid crystal display televisions, dropped 12.0 percent.
Looking ahead, manufacturers polled by the ministry anticipated that output will gain 1.4 percent in March and shed 1.3 percent in April.
The deadline for the submission of production forecast survey sheets was March 10, so the projection is basically based on the makers’ plans before the disaster struck, a METI official said.
The index of industrial shipments gained 1.7 percent to 98.0 in February and that of industrial inventories was up 1.5 percent to 101.8.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.