TOKYO (Reuters) – Output at Japanese factories likely declined for a third month in November, according to economists in a Reuters poll, as shrinking global demand took a toll on electronics and associated products.
On a more hopeful sign for the world’s third-largest economy, the same poll forecast retail sales to grow for the ninth straight month, pointing to the resilience of consumer spending despite inflation running at a four-decade-high.
Industrial production was expected to have dipped 0.3% in November from the previous month, the median forecast of 16 economists showed on Friday. Output fell 3.2% in October and 1.7% in September.
“Although supply disruptions like semiconductor shortage have been easing, fears of a global economic slowdown are cooling demand for electronic parts and devices – items sensitive to business cycles”, said Takeshi Minami, chief economist at Norinchukin Research Institute.
Some analysts, however, said improved supply-chain conditions for automakers and solid domestic demand for machinery used for production would push factory output back to growth territory in November.
Japan’s economy, like many countries, remain hostage to global uncertainties due to higher inflation, rising overseas interest rates and the challenges posed by the Ukraine war.
On top of that, the government said in a report on Wednesday that Japan must pay attention to risks from China’s COVID-19 resurgence as it downgraded the official assessment of factory output for the first time in six months.
The Reuters poll also projected Japanese retail sales to have risen 3.7% in November from a year earlier, extending a growth streak that started in March.
That indicates consumption likely stayed robust in the face of the fastest consumer inflation since 1981, also supported by a boost from inbound tourists after Japan’s October border reopening.
Japan’s jobs-applicants ratio and the jobless rate were expected to improve slightly in November, coming in at 1.36 and 2.5%, respectively.
The government will release the factory output data at 8:50 a.m. on Dec. 28 (2350 GMT, Dec. 27) and retail sales data at 8:50 a.m. on Dec. 27 (2350 GMT, Dec. 26). Jobs data are due at 8:30 a.m. on Dec. 27 (2330 GMT Dec. 26).
(Reporting by Kantaro Komiya; Editing by Shri Navaratnam)