Japan Industrial production May 2022

Industrial production fell 7.5% m/m on a seasonally adjusted basis in May (April: -1.5% m/m). The result marked the sharpest decline since May 2020. Based on the details of the report, manufacturing output fell in May, while mining output rose at a faster pace.

On an annualized basis, industrial production declined at a more moderate rate of 3.1% in May (April: -4.9% y/y). Meanwhile, the average annual growth of industrial production in May fell to 2.4% (in April: +4.0%). This signals a worsening trend in the industrial sector.

Min Ju Kang of ING commented on the outlook:

“Going forward, we expect positive technical returns from easing lockdowns in China, but the recent slowdown in the US economy is likely to hinder a recovery in the fourth quarter. Based on today’s data release, in addition to last week’s weaker-than-expected consumption result, we revise Japan’s Q2 GDP downward from a seasonally adjusted 0.5% to 0.3%, and annual GDP in 2022 from 1% year-on-year to 0.8%.”

FocusEconomics Consensus Forecast experts forecast that industrial production will grow by 1.7% in 2022, down 0.2 percentage points from last month, and grow by 3.0% in 2023.