September Industrial Production

◆The September 2014 indices of industrial production achieved growth for the first time in two months at +2.7% m/m, while at the same time exceeding market consensus (+2.2%) – all in all positive results. Although it is a bit early to declare that production has hit bottom, these results bring hope that industrial production will make a comeback in the near future. METI’s production forecast survey sees the index reflecting a steady undertone in October and November.

◆As for production by industry in September, thirteen out of the total of fifteen industries experienced growth. Fabricated metals remained flat in comparison to the previous month, and the only industry which reported declines was the chemical industry at -0.1% m/m. Besides the general strength of overall production, the extent of industries reporting growth was quite wide-ranging, and individual industry performance showed very positive results.

◆According to METI’s production forecast survey, a comeback is expected in industrial production after some initial ups and downs, with a slight decline seen in October (-0.1%) and growth of +1.0% expected in November. As for October production plans by industry, those industries which contributed to considerable growth in September (electronic components and devices, information & communications equipment, and the transport equipment industry) are expected to pull overall performance down. In November, general purpose, production & business oriented machinery is expected to see a decline in production, while all other industries are expected to see production increases.