TOKYO: Japan’s industrial output rose in October for the first time in four months as re-opening of Asian factories eased supply constraints for automakers, offering some hope for the export-reliant economy as it struggles to mount a solid recovery.
The increase was smaller than market expectations, underscoring the lingering impact of global supply chain disruptions. Analysts, however, see signs of an improving outlook, report agencies.
Factory output grew 1.1% from the previous month in October, government data showed on Wednesday, marking the first increase since June. It compared with a 1.8% gain forecast in a Reuters poll of economists and followed a 5.4% decline in the previous month.
Auto production rose 15.4% month-on-month in October for its first increase in four months thanks to the waning impact of parts shortages in Asia, a Ministry of Economy, Trade and Industry (METI) official told a briefing.
Japan’s automakers - which account for 15% of the industrial output statistics, according to METI - including Toyota Motor Corp and Honda Motor Co announced earlier this month their plans to return to normal production in December and make up lost output over coming months.
Manufacturers surveyed by the government expect output to jump 9.0% in November, led by a 35.8% surge among automakers, followed by a 2.1% gain in December, the data showed.
“While other sectors’ production predictions seem optimistic, carmakers output plans are reliably solid,” Minami said, attributing it to the automakers’ lean production processes that affect a wide variety of parts suppliers.
Manufacturers’ plans reflect eased impacts of chip and parts shortages, a government official said, though he warned of risks in firms’ supply chains, including any fallout associated with COVID-19’s Omicron variant.
Separate data on Tuesday showed Japan’s jobless rate stood at 2.7% in October, down from the previous month, while an index gauging job availability fell to 1.15 from 1.16 in September.
After a contraction in July-September, economists polled by Reuters expect the world’s third-largest economy to rebound annualised 5.1% in the current quarter thanks to uptick in consumption, partly due to the lifting of the pandemic-induced state of emergency curbs.
The Bank of Japan will hold a rate-review meeting on Dec. 16-17, where the central bank is set to keep its ultra-easy policy unchanged and may decide whether to extend pandemic-relief lending programmes beyond current March 2022 deadline.