Industrial production rose for a second month, government data showed Wednesday, as manufacturers restored operations at plants and supply chain disruptions eased after the March 11 earthquake and tsunami.
Factory output rose 5.7 percent in May from April, when it rose 1.6 percent, the Ministry of Economy, Trade and Industry said. The median estimate of 30 economists surveyed by Bloomberg News was for a 5.5 percent gain.
The report adds to evidence that the world’s third-largest economy is pulling out of its slump as companies including Toyota Motor Corp. and Nissan Motor Co. hire workers and restore facilities damaged by the March 11 temblor. In another sign that the economy is recovering, retail sales fell at a slower pace than economists expected, the government said Tuesday.
“Supply chain disruptions are being fixed faster than expected,” Yoshiki Shinke, senior economist at Dai-ichi Life Research Institute in Tokyo, said before the report. “Production will likely have a V-shaped recovery.”
Carmakers are hiring temporary workers, signaling the industry’s recovery from the earthquake. Toyota said last week it would employ as many as 4,000 workers from mid-July as it prepares to ramp up production in October. Nissan has said it has started hiring as many as 200 temporary workers to help boost output.
“The recovery has been fast,” Nissan Chief Executive Officer Carlos Ghosn said June 22. “Today we are near normal (domestic) production levels,” he said.
The government last week raised its assessment of the economy for the first time in four months as production and exports show signs of recovering from a slump caused by the disaster. The Bank of Japan also upgraded its view of the economy this month.
Recent data suggest the economy’s contraction has extended into this quarter. Exports fell more than economists estimated in May, while machinery orders, an indicator of future capital spending, fell for the first time in four months in April.
Analysts expect gross domestic product to contract at a 2.97 percent annual pace in the second quarter before returning to growth in the second half, according to the average forecast of 43 economists in a survey by the government-affiliated Economic Planning Association released June 8.
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