TOKYO, Sept 27 (Askume) – Japan’s industrial output fell in August due to weak overseas demand and typhoons that forced local factory closures, a Askume survey showed on Friday. These factors could impact the pace of the overall economic recovery.
A survey of 18 analysts showed industrial output is expected to have fallen 0.9% month-on-month in August after rising 3.1% in July.
Takeshi Minami, chief economist of Norinchukin Research Institute, said: “Due to slow foreign economic growth, industrial production has fluctuated, exports of high-tech products have not grown as expected, and car certification scandals have also surfaced.”
Automobile exports are likely to remain sluggish, while domestic and overseas demand for machine tools remains weak, Nan said.
Typhoon Shanshan, which struck Japan in late August, may have contributed to the drop in factory output, an analyst at SCB Research Institute said. The storm temporarily halted operations at factories including Toyota Motor Corp. (7203.T) and semiconductor company Renesas Electronics (6723.T) .
Japan’s economy grew slightly slower than initially reported but remained solid in the second quarter thanks to lower revisions to business and household spending.
Analysts expect the economy to continue to recover as wages and personal and business spending rise, although risks remain from external factors such as a possible slowdown in the US economy and weak demand in China. China announced several stimulus measures this week, but analysts say it will take time to restart economic activity.
Meanwhile, retail sales are expected to rise 2.6% in August, following a 2.3% increase in July. Economists attribute the increase to strong demand for clothing and preserved foods following the hurricane and earthquake .
Japan’s unemployment rate is expected to ease slightly to 2.6% in August from 2.7% in July, and the job-seeking ratio is likely to remain at 1.24, up from the previous month, the survey found.
The trade department will release factory output and retail sales data on Monday, September 30 at 8:50 am (Sunday 2350 GMT), while employment data will be released on Tuesday, October 1 at 8:30 am.
