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Tag: industrial production

  • Japan Factory Output Drops 1.7% as Vehicle Assembly Halts

    Japan Factory Output Drops 1.7% as Vehicle Assembly Halts

    Japan’s factory output shrank 1.7 per cent in August from July. Severe weather and seismic disruptions hit automotive assembly lines, reversing expectations of a rebound.

    A Reuters poll had pointed to a 1.7 per cent expansion. Instead, output missed median forecasts and fell for a second straight month.

    Disruptions Hit Automotive Assembly

    Vehicle production slumped 6.8 per cent month on month, according to Ministry of Economy data. Plant operations halted after an earthquake and a typhoon disrupted domestic logistics and assembly schedules in August.

    General-purpose and business machinery output fell 6 per cent over the same period. Those steep drops in vehicles and machinery wiped out modest gains across other manufacturing categories.

    Pressure on Regional Supply Chains

    Automakers across Asia depend on precision components and sub-assemblies exported directly from Japan. When domestic plants halt, regional supply chains feel the shock within weeks. That pinches vehicle availability for dealerships across Southeast Asia and Australia.

    Production volatility in Japan complicates inventory planning for regional parts suppliers and downstream car retailers. Dealership networks running lean stock models face delayed order fulfilments whenever Japanese assembly hubs stall.

    Central Bank Rate Calculations

    This two-month slide lands at a delicate moment for central bank policymakers. Bank of Japan officials continue to review economic indicators before deciding whether to raise interest rates in the near term.

    Slowing factory output complicates that plan. Raising borrowing costs during an industrial slump risks cooling domestic capital investment and consumer spending.

    Forecasts Point to Autumn Rebound

    Repeated natural disasters tested the industrial base throughout the summer, extending a volatile run for domestic goods producers.

    Manufacturers surveyed by the Ministry of Economy expect seasonally adjusted production to rebound 3.2 per cent in September and expand 3.1 per cent in October.

  • South Korea’s industrial production rebounds

    South Korea’s industrial production rebounds

    South Korea’s industrial production rose 1.2 percent in December from a month earlier, posting the first rebound in three months, a government report showed on Friday.

    The production in all industries declined 1.3 percent in October and 0.4 percent in November each before gaining 1.2 percent in December on a month basis, Xinhua cited Statistics Korea as showing.

    The rebound came on the back of improvement in both production and investment among manufacturers.

    Production in the manufacturing and mining industries grew 1.2 percent in December from the previous month. It was attributable to the resumption of operations in oil refiners and petrochemical companies after the end of the regular maintenance period.

    Output in chemical products increased 4.7 percent, with oil-refining activity expanding 7.3 percent.

    Inventory among manufacturers reduced three percent, and the factory utilisation rate in the manufacturing industry averaged 73.8 percent in December, up one percent from the previous month due to a year-end demand.

    Production among service companies were steady last month due to slump in finance, insurance and wholesale & retail sectors that offset growth in transport and leisure sectors.

    Retail sales, which reflect private consumption, reduced 0.1 percent in December from the previous month, falling for two straight months.

    The private consumption jumped in October thanks to massive promotion events, called Korea Black Friday, and consumption tax cuts for cars, but it turned downward for two months through December.

    Sales of semi-durable goods like clothing tumbled five percent as the average temperature of the winter season was higher than usual despite a temporary cold wave.

    Durable goods sales increased 3.8 percent on demand for cars.

    Facility investment declined 6.1 percent in December on a monthly basis as machinery and transport companies spent less on equipment.

    Construction works completed expanded 7.4 percent as a large number of apartments went on sale and social overhead capital (SOC) was spent much last month.

    For the whole year of 2015, industrial production increased 1.5 percent, up from a 1.3 percent expansion in 2014.

    Production in the manufacturing and mining industries reduced 0.6 percent last year as sluggish exports dragged down the demand for production of ships and electronic devices such as handsets.

    It marked the first reduction in manufacturing production since 2009 when the global financial crisis peaked.

    Manufacturers posted a capacity utilisation rate of 74.2 percent in 2015, down 1.9 percent from a year earlier.

    It was the lowest in 32 years since 1998 when the Asian foreign exchange crisis hit South Korea.

    Production in the service industry grew 2.9 percent in 2015, recording the biggest yearly expansion in four years.

    Retail sales increased 3.4 percent last year, with facility investment growing 6.2 percent.

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