Factory production and consumer spending in Japan both fell the most on record in last month as the earthquake, tsunami and nuclear disasters sent the country’s halting economic recovery into reverse.
The government said yesterday that industrial production plunged 15.3 percent from February. The central bank, meanwhile, slashed its economic growth forecast for the year through to March next year.
Transport equipment recorded the sharpest production drop — a 46.4 percent decline — underscoring the northeast region’s integral role in supplying Japan’s auto industry with parts.
The Japan Automobile Manufacturers Association announced yesterday that the country’s vehicle production fell 57.3 percent last month from a year earlier to 404,039 vehicles.
The Ministry of Economy, Trade and Industry said Japan’s industrial production would recover “gradually” from damage caused by the disasters, forecasting a 3.9 percent improvement this month and a 2.7 percent uptick for next month.
However, Martin Schulz, senior economist at Fujitsu Research Institute in Tokyo, said the government’s forecast was probably overly optimistic.
Even if it held true, it would be months before production reached its already depressed pre-disaster level, he said.
“This is a frustrating outlook,” he said.
Ministry officials said the decline last month in the country’s index of output at factories and mines was the greatest since record keeping began in 1953. The previous largest decline was in February 2009, when the global financial crisis that began a few months earlier dragged production down 8.6 percent.
Japan’s central bank yesterday cut its forecast for economic growth because of production holdups and decreased consumer demand.
The Bank of Japan said it expects GDP to expand 0.6 percent in the fiscal year to last month, down from its 1.6 percent growth forecast in January.
“As a result of the disaster, the economy will inevitably continue to face strong downward pressure for the time being,” the bank wrote in a report.
The bank, which has pumped billions of dollars into the financial system to stabilize the economy since the quake, said it was keeping its key interest rate unchanged at zero to 0.1 percent in a bid to spur growth.
In another report yesterday, the government’s statistics bureau announced that consumer spending also experienced a record decline last month, falling 8.5 percent from a year earlier.
The previous sharpest decline in the numbers that have been tracked since 1963 was a 7.2 percent dip in February 1974, soon after the 1970s oil shock helped trigger a worldwide stock market crash.
Separately, the government said the nation’s unemployment rate was unchanged last month from February at 4.6 percent, but the survey excluded the three prefectures hardest hit by the disasters.
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