Tokyo (Japan), September 30: Japan's August industrial production slipped 3.2 percent from a month earlier as auto production showed weakness amid a global chip shortage and supply chains disruption, government data revealed Thursday.
According to the Ministry of Economy, Trade and Industry (METI), the recovery in industrial production "has paused," showing a downtrend compared with the view sustained from August last year through July this year that output is "picking up." The assessment is revised down for the first time in 16 months since April 2020.
The seasonally adjusted production index for factories and mines turned 95.0 from a base of 100 in 2015, declining for the second consecutive month, the ministry said in a preliminary report.
Production of electrical machinery as well as information and communication electronics equipment, such as laptop computers, went down 10.6 percent due to a tight supply of chips and other components.
Output of the auto industry also sank 15.2 percent from the previous month, triggered by the global shortage of semiconductors as well as factory shutdowns in Southeast Asia, as the spread of COVID-19 disrupted auto components supply, a ministry official said.
"The auto industry looks set to face harsh headwinds for months to come," said Shunsuke Kobayashi, chief economist at the equity research department of Mizuho Securities Co.
Japan's pace of economic recovery is regarded as slow compared with other developed countries, as the country is currently forced to stop production lines, and its weak exports were also affected by the virus situation in Asia, Kobayashi said, adding that the three factors are considered a "triple woe" for automakers.
Major automakers Toyota Motor Corp. and Honda Motor Co. have announced plans to remain curbing their production in September and beyond.
The index of industrial shipments fell 3.8 percent to 92.7 and that of inventories slipped 0.3 percent at 94.7.
The ministry expects output to gain 0.2 percent in September and increase 6.8 percent in October based on a poll of manufacturers, but officials said the outlook is probably not a full reflection of the pandemic situation and its impact on parts procurement.
Source: Xinhua
