• Kyodo

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Japan’s August industrial output rose 1.7 percent from the previous month for the third straight monthly increase on the back of a pickup in auto demand, retaining a modest recovery trend after the novel coronavirus pandemic dampened manufacturing activities, government data showed Wednesday.

The seasonally adjusted index of production at factories and mines stood at 88.7 against the 2015 base of 100, the Economy, Trade and Industry Ministry said in a preliminary report. The result followed an upwardly revised 8.7 percent jump in July.

For August, the ministry upgraded its assessment, saying industrial output is “picking up.” In the previous month, it said the output “shows picking-up movement.”

Still, the index level remains low compared to the pre-coronavirus reading of 95.8 in March.

“Against a backdrop of resumed business and manufacturing activities, which had been stalled due to the pandemic, the index has been steadily recovering,” a ministry official said. “But it will take a while for the index to return to the level before the coronavirus. The rebound is slow.”

The index of industrial shipments climbed 2.1 percent to 87.6, while that of inventories fell 1.4 percent to 97.9.

Production in the auto industry gained 8.9 percent in August from a month earlier, remaining the biggest contributor to the index’s rise as some carmakers started making new models amid a recovery in demand.

Manufacturers of iron, steel and nonferrous metals also advanced 6.5 percent, while makers of electronic parts and devices saw a 4.6 percent rise.

However, makers of production machinery and electrical machinery saw a decline in the month.

Based on a poll of manufacturers, the ministry expects output to increase 5.7 percent in September and rise 2.9 percent in October.

“Industrial output is clearly recovering, helped largely by the resumption of production by makers of automobiles and their parts as sales are picking up in the United States,” said Takuji Aida, chief Japan economist at Societe Generale Securities Japan Ltd.

“While the service sector, including restaurants, sees a slow recovery, the government’s various measures to stimulate consumption, including subsidies for travel, and progress in capital investments in the construction sector are expected to support industrial output,” Aida said.

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