The country’s industrial output in July jumped a record 8.0 percent from the previous month, as production of autos and their parts continued rebounding from a plunge triggered by the coronavirus pandemic, government data showed Monday.
The seasonally adjusted index of production at factories and mines stood at 86.6 against the 2015 base of 100, the Economy, Trade and Industry Ministry said in a preliminary report.
The July output increase was the highest since January 2013 when the ministry started compiling data under the current method, and was the second straight rise following a downwardly revised 1.9 percent increase in June.
Still, the result was not strong enough to prompt the ministry to revise up its assessment, as the index level remains low compared to the pre-coronavirus reading of 95.8 in March.
“We expect output to moderately recover in the coming months. But it will take more time for a full rebound to pre-coronavirus levels,” a ministry official said.
For July, the ministry said industrial output “shows picking-up movement.” In June when it raised its view, the ministry said output “has bottomed out and shows picking-up movement.”
The official said the assessment remains unchanged even though the description of the view was tweaked.
Production in the auto industry gained 38.5 percent in July from a month earlier, remaining the biggest contributor as supply chain disruptions caused by the pandemic were resolved and demand recovered.
A few sectors saw a production decline in the month such as makers of printers and aircraft parts.
The index of industrial shipments climbed 6.0 percent to 85.3, while that of inventories fell 1.6 percent to 99.2.
Based on a poll of manufacturers, the ministry expects output to increase 4.0 percent in August and rise 1.9 percent in September.
“It has become clear that the index is picking up” after it fell around 20 percent between February and May due to the pandemic, said Takuji Aida, chief Japan economist at Societe Generale Securities Japan Ltd.
“Looking ahead, the index will be supported by recovery in exports and increase in demand for consumption and capital expenditures,” he said.
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