Japan WorsenOutlook as Industrial Output Dropped in April

Japan's industrial output did not meet expectations for the month of April according to data on Thursday and did not make the situation lighter given the decline in the first quarter.  

The increase in industrial output came out lower to 0.3 percent in April than the forecast of 1.2 increase and 1.4 percent rise in March. The sluggish growth was because of the 5.6 percent decline in production of electronic parts while inventories increase for three consecutive months worsening the outlook in overseas demand.

Last year, the economic growth of Japan peaked higher but for this year, it will be more subdued given the weakened data which is likely to further decline as the companies would center their attention on unsold goods.

In general, production is progressing slowly as companies with more materials reduce their output, according to an economist, Asuka Sakamoto, at Mizuho Research Institute.

The output is expected to decline in the next few months but consumer spending is likely to decline in the second quarter, which would be good for the economic growth. But he added that he is not worried about a recession.

Manufacturers expected output is anticipated to increase by 0.3 percent in May but declined to 0.8 percent in June, based on the survey on manufacturers by the Ministry of Economy, Trade, and Industry.

In the first quarter, Japan’s economic decline was due to weak investment, exports, and consumption that influenced growth that was further worsened on how fast can they recover given the output data and forecast on Thursday.

Meanwhile, the production of cars and machines rose in April, giving a positive news.