Japanese Industrial Production May 2022

Industrial production collapsed 7.5% mom in May (April: -1.5% mom). Output was the biggest contraction since May 2020. Looking at the release details, industrial production fell in May, while mining production rose at a faster pace.

On an annual basis, industrial production fell at a more moderate pace of 3.1% in May (April: -4.9% YoY). Meanwhile, average annual industrial production growth fell to 2.4% in May (April: +4.0%). This indicates a deteriorating trend in the industrial sector.

ING’s Min Joo Kang commented on the look:

“Going forward, we expect a positive technical payback from easing the lockdown in China, however, the recent slowdown in the US economy is likely to create headwinds for recovery in the fourth quarter. Based on today’s data, as well as weaker-than-expected consumption results last week, We are reviewing Japan’s second-quarter GDP from 0.5% qoq seasonally adjusted to 0.3%, and annual GDP for 2022 from 1% y/y to 0.8%.”

Members of the FocusEconomics Consensus forecast committee expect industrial production to rise 1.7% in 2022, a 0.2 percentage point drop from last month, and growth of 3.0% in 2023.

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