November 2022 Industrial Production

◆The November 2022 indices of industrial production declined for the third consecutive month at -0.1% m/m. Despite progress in recovery for the motor vehicles industry, a major sector in Japan’s economy, capital goods continued to exhibit lax performance with weak overseas demand. The Ministry of Economy, Trade and Industry has therefore revised its economic assessment downwards for the second consecutive month to “industrial production has weakened.”

◆As for the future of industrial production, the indices are expected to mark time with the competing influences of the easing up of supply constraints and shrinking overseas demand, but then later, production is expected to shift back into a growth trend. In addition to the motor vehicles industry, other machinery with an accumulated order backlog will likely contribute to boosting the index. In the US and Europe, major export destinations, the economy is in a downturn with monetary tightening. And the production indices will likely be susceptible to the question of whether economic normalization goes smoothly in China as it shifts into living with corona.

◆The November 2022 Indexes of Business Conditions are to be published on January 11, 2023, and the leading index, the composite index, is expected to be down by -1.2pt to 97.4, while the coincident index is expected to be down by -0.5pt to 99.1. Based on the predicted value, the assessment of the coincident index will automatically remain at “improving.”