Japan’s industrial production expanded for a second straight month in December, as strengthening global demand injected companies with renewed confidence.
Factory output rose 3.1 percent from November, the Japanese Ministry of Economy, Trade and Industry said yesterday. Driving the gains were export-reliant industries including transport equipment, electronic devices and steel.
The figure beat Kyodo news agency’s average market forecast for a 3 percent rise and prompted the ministry to upgrade its assessment of industrial production — a key barometer of Japan’s economic health.
It now says output “shows signs of an upward movement.” In December, it described industrial production as “weakened.”
The result marked the strongest monthly showing of last year and indicates that overseas demand is starting to accelerate, sparking the manufacturing sector. Global appetite for Japanese goods, particularly from China, has served as a critical lifeline for the country’s recovery amid lackluster domestic demand.
A steady slowdown in export growth between February and October last year, as well as a strong yen, had triggered concerns that the economy was faltering. Industrial production also declined consecutively between June and October.
Analysts are more bullish about this year.
Last week, the central bank upgraded its economic outlook for the fiscal year ending March 31. It now expects real GDP to expand 3.3 percent, up from 2.1 percent forecast in October.
Government data last week showed that exports from the world’s third-largest economy rose 13 percent in December from a year earlier, accelerating for the second straight month.
The industrial production survey points to further growth last month, with output forecast to rise 5.7 percent. This month’s output is projected to slip 1.2 percent.
The report also shows that shipments were up 1.1 percent in December from a month earlier and inventories expanded 1.4 percent.