March Industrial Production

◆March 2014 indices of industrial production recorded the first rise in 2 months, up +0.3% m/m, but fell below market consensus at +0.5% m/m. Growth in production was fairly limited in March, a reminder of February’s major snowstorms, and though the growth trend is continuing, this does indicate a temporary slowdown. Meanwhile, the inventory index was up for the first time in 8 months at +1.8% m/m, while the shipment index fell for the second consecutive month at -1.2%. The index of inventory rate therefore rose for the second month in a row at +2.6% m/m.

◆As for production by industry in March, seven out of the total of fifteen industries recorded m/m growth, while eight industries suffered month-to-month declines, hence the mixed results. Industries which recorded growth included transport machinery, electronic components /devices, and ceramics, stone and clay products, whose performance helped to push overall results upwards.

◆METI’s production forecast survey sees April production plans down by 1.4% m/m, while May is expected to achieve m/m growth of 0.1%. Production has been experiencing a growth trend, but is seen running into a temporary slowdown in April. The growth trend is expected to return in May, though the margin of increase will be on the small side. It appears that production will avoid the extremes of the downtrend, a recoil or reactionary decline occurring after the increase in consumption tax.