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Japan April industrial output up 2.5%, exceeds pre-pandemic level

This file photo taken from a Mainichi Shimbun helicopter shows high-rise buildings in Tokyo's Shinjuku Ward. (Mainichi)

TOKYO (Kyodo) -- Japan's industrial output in April rose 2.5 percent from the previous month, with the index of production at factories and mines exceeding the level before the coronavirus pandemic, government data showed Monday.

    The seasonally adjusted index stood at 99.6 against the 2015 base of 100, above the 99.1 registered in January 2020 before the global spread of COVID-19, the Ministry of Economy, Trade and Industry said in a preliminary report.

    The figure marked the second straight monthly rise, following a downwardly revised 1.7 percent increase in March. A ministry official said firm demand for capital investment abroad led to robust output in sectors related to machinery and information technology.

    The April index hit the highest level since September 2019, before Japan's consumption tax was raised from 8 percent to 10 percent, the data showed. After being battered by the emergence of the coronavirus pandemic, production has been on a gradual recovery trend since June last year.

    The ministry retained its assessment of the data, saying industrial output is "picking up."

    But the official warned of downside risks going forward due to the spread of more contagious variants of the coronavirus as well as the global shortage of semiconductors.

    In April, output of general-purpose and business-oriented machinery, such as steam turbines, air pressure governors and pumps, gained 16.1 percent, while that of production machinery, including chip making tools, rose 7.8 percent, contributing to the overall increase in the index.

    Output in the electrical machinery as well as the information and communication electronics equipment sector grew 10.9 percent, thanks to strong demand for batteries used for cars.

    Meanwhile, output in the auto sector slipped 0.8 percent amid a global chip crunch.

    Based on a poll of manufacturers, the ministry expects output to fall 1.7 percent in May and increase 5.0 percent in June.

    Looking ahead, Taro Saito, executive research fellow at the NLI Research Institute, said he expects the upward momentum to continue in the coming months despite the current virus state of emergency, which will be in place until June 20, saying it has little impact on factory activities.

    Although he warned of the risk that the global chip shortage may continue to cast a shadow over auto production, he said that "many other sectors are expected to see firm gains, which will improve Japan's overall output."

    The index of industrial shipments increased 2.6 percent to 97.3 while that of inventories fell 0.1 percent to 94.7.

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