November 2023 Industrial Production

Production indices maintain firm undertone, while silicon cycle expects further improvement


December 28, 2023

  • Kazuma Kishikawa


◆The November 2023 indices of industrial production declined for the first time in three months by -0.9% m/m. While the export volume index (seasonally adjusted by the Cabinet Office), which is highly linked to the production index, fell sharply in November (-5.6%), the production index was firm. As for performance of specific industries, the motor vehicles industry saw a reactionary decline in small passenger cars, which had increased significantly in the previous month. On the other hand, there were indications of a further recovery in the silicon cycle, such as a large increase in production of MOS ICs for the second consecutive month. The Ministry of Economy, Trade, and Industry has left its economic assessment unchanged at “Industrial Production fluctuates indecisively.”

◆As for the future of industrial production, the indices are expected to continue marking time with a mixture of favorable and unfavorable factors. Recovery production in regular passenger cars is expected to continue providing underlying support for overall performance, while the silicon cycle entering a recovery phase is expected to bring upward pressure on the production index. On the other hand, capital goods are expected to be a drag on overall performance with continued sluggish demand centering on overseas economies. In addition, in the short-term, the influence of the halt of operations at the factories of Daihatsu Motor is expected to hold down the production index somewhat.

◆The November 2023 Indexes of Business Conditions are to be published on January 11, 2024, and the leading index is expected to be down by -1.1pt to 107.8, while the coincident index is expected to be down by -1.4pt to 114.5. Based on the predicted value, the underlying tone for November is automatically left unchanged at "improving".

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