• Kyodo


Industrial output in October rose at the fastest pace since January 2015 with 2.9 percent growth from the previous month as the negative effects of natural disasters on production waned, government data showed Friday.

The stronger-than-expected rise prompted the government to raise its basic assessment for the first time in about a year, saying output is “picking up slowly.”

The seasonally adjusted index of production at factories and mines stood at 105.9 against the 2015 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report. The result followed a revised 0.4 percent fall in September.

The index’s recovery came as manufacturers ramped up production of compressors, engines and electronic devices as well as cars and auto parts, according to the data.

Natural disasters such as typhoons hit parts of the country in the July to September period, disrupting output. Previously, the ministry said industrial output was “picking up slowly, but shows some signs of weakness.”

“Companies have been increasing production to make up for the delays caused by the disasters,” a ministry official said in explaining why the basic assessment was upgraded.

The index of industrial shipments rose 5.4 percent to 106.6 and that of inventories was down 1.4 percent at 101.2.

Still, economists say the outlook for production may not be so rosy amid uncertainty over how the United States and China will tackle the recent spike in trade tension.

“On the positive side, it’s good to see the effects of the disasters having tapered off. But the outlook from now is uncertain,” said Toru Suehiro, senior market economist at Mizuho Securities Co.

Weakness in output for machinery used to produce semiconductors and flat panel displays signals that demand from China, engaged in a tariff war with the United States, has slowed, Suehiro added.

The sector registered a 3.1 percent drop from September.

Manufacturers polled by the ministry said they expect output to increase 0.6 percent in November and gain 2.2 percent in December.

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