Japanese factory production expands the decline in automobile production cuts

Tokyo — Japan’s industrial output will be 2 in August as COVID-19 outbreaks elsewhere in Asia disrupt the supply chain of automakers already facing headwinds due to prolonged chip shortages It decreased for the month in a row.

According to another data released Thursday, retail sales fell for the first time in six months in August as households cut spending amid a recurrence of the coronavirus, indicating a downturn in consumer sentiment.

Data show the imminent challenge to the next prime minister, Fumio Kishida, who won the ruling party leaders’ vote on Wednesday ahead of the general elections that the pandemic will continue to bite into the Japanese economy this quarter and must take place by late November. It suggests that it was raised.

According to official data on Thursday, factory production in August fell 3.2% from the previous month, and automobile and electronic equipment production slumped, dropping 1.5% in July and then shrinking for the second straight month.

This decline was greater than the 0.5% decline predicted by Reuters economist polls.

Industry lobbies warned earlier this month that major Japanese automakers such as Toyota, Nissan and Honda Motor Co., Ltd. are facing production cuts from late August due to a shortage of parts that could last until October. ..

Suzuki announced on Thursday that it will close two Japanese assembly plants for 1-3 days in October due to supply shortages.

“Car production cuts have affected many other relevant sectors that need to cut supplies when factories close,” said Nanbu, chief economist at the Norinchukin Research Institute. “The suspension of recovery from a pandemic has lasted longer in Japan than in other countries.”

Manufacturers surveyed by the government expect production to increase by 0.2% in September and 6.8% in October, but given the uncertainty about car production cuts, a bolder forecast is “big down.” “There is a run-out risk,” government officials told reporters.

For the first time since April 2020, the government has downgraded the assessment of industrial production as “deadlocked.”

Analysts expect the world’s third-largest economy to grow at an annual rate of 1.2% this quarter. This is a much weaker growth than in other developed countries, as suppression of the stop-go coronavirus hits consumer spending.

“Japan’s gross domestic product from July to September now seems to be approaching zero growth,” said Minami, as production and consumption in August were lower than expected. He added that it could lead to a deficit.

According to another government data on Thursday, retail sales were weaker than expected, with retail sales in August down 3.2% year-on-year to home appliances and clothing.

This was the first decline in six months, more than the median market forecast of 1.0%.

Worse than expected after Japan announced earlier this week that it would lift coronavirus control in all regions, as cases of COVID-19 have dropped significantly and about 60% of the population has been fully vaccinated. Retail sales have been generated.

Compared to the previous month, retail sales were down 4.1% seasonally adjusted.

Kentaro Komiya, Yoshifumi Takemoto