Japanese industrial output recovers in February 2018 from a sharp decline in the first month of the year and companies are forecasting further gains over the next few months after production data shows that it is starting to expand again. The industrial production rose by 4.1% in February compared to the previous month, which is slightly below economists’ expectations for an increase of 5%. However, data show a recovery from the revised decline of 6.8% in January.
The significant improvement in February was due to higher performance of cars, construction equipment and semiconductors.
The manufacturers surveyed by the Ministry of Economy, Trade and Industry expected production to grow by 0.9% in March and to increase by 5.2% in April.
The separate data show that labor demand is slightly decreasing and the unemployment rate is higher in February, but the labor market is expected to remain shrinking due to a shortage of workers.
The growth in industrial production shows that the weakness in January was temporary and the economy is poised to continue its record-breaking growth due to stable exports and improved demand on the domestic market.
The vehicle, engine and car manufacturing increased by 10.3% in February, the fastest growth since April last year. The manufacture of construction equipment and factory machinery reported growth of 3.6% in February, while production of semiconductors and electronic parts rose by 4.8%.
The unemployment in the country of the rising sun rose to 2.5% in February from 2.4% in the previous month.
The Japanese economy is growing for eighth consecutive quarter – the longest since 1980, with consumer spending, exports, and capital spending contributing to growth.
Economists say consumer spending may lose momentum this year, but exports are expected to remain strong due to sustainable global demand.