On January 16, 2017, smoke rises from a factory during the sunset at the Keihin industrial zone in Kawasaki, Japan. Toru Hanai/File Photo/REUTERS (Reuters) – TOKYO, June 30 (Reuters) – In May, Japan’s industrial output fell by the most in a year, as a dramatic decline in automobile manufacturing threatened to derail the country’s economic recovery just weeks before the Olympic Games in Tokyo. According to a poll conducted by experts earlier this month, the world’s third-largest economy will likely grow at a significantly slower rate than previously estimated in the current quarter, owing in part to sluggish consumer spending. find out more Official data released on Wednesday indicated that factory output fell 5.9% in May from the previous month, with declines in the construction of cars and production gear contributing to the greatest monthly drop since May last year. The decrease, which was the first in three months, was far less than the 2.4 percent dip predicted by economists in a Reuters survey. It came after an increase of 2.9 percent the previous month. A 19.4% loss in motor vehicle manufacturing, mostly due to supply concerns with semiconductor chips, as well as a decline in production machinery, pulled down output. The Ministry of Economy, Trade and Industry (METI) polled manufacturers, who predicted a 9.1% increase in output in June, followed by a 1.4 percent dip in July. The administration maintained its previous evaluation of industrial production, claiming that it was improving. Separate statistics released on Tuesday indicated that retail sales increased for the third month in a row in May, but it did not allay concerns that the economic recovery will take time to gain traction since COVID-19-related headwinds continued. find out more Japan’s economy shrank in the first quarter as a delayed vaccination rollout and emergency measures to combat an outbreak of illnesses weighed on domestic demand, casting doubt on the country’s economic prospects. Despite these difficulties, Economy Minister Yasutoshi Nishimura expects the economy to recover in the current fiscal year, which runs from April to March 2022. Jacqueline Wong did the editing. The Thomson Reuters Trust Principles are our standards. Continue reading
