TOKYO (REUTERS) – Japan’s industrial output rose for the fifth straight month in October, fuelled by stronger machinery and car production, suggesting the economic is recovering further from the damage caused by the Covid-19 crisis.
The world’s third-largest economy rebounded sharply in the third quarter from a pandemic-induced slump, thanks to a record surge in private consumption and stronger overseas demand that boosted exports and output.
Official data released on Monday showed factory output jumped 3.8 in October from the previous month, mainly due to strength in general machinery production and motor vehicle manufacturing.
The solid increase beat the median market forecast of a 2.1 per cent rise in a Reuters poll of economists, and was in line with the prior month’s 3.9 per cent gain.
Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expected output to grow another 2.7 per cent in November and decline 2.4 per cent in December.
The government kept its assessment of industrial production unchanged, saying it was picking up.
Separate data showed retail sales posted their first gain in eight months in October year-on-year after consumers sharply curtailed spending in October 2019 following a sales tax hike at that time.
Retail sales jumped 6.4 per cent year-on-year in October, matching a 6.4 per cent gain expected by economists in a Reuters poll and turning around from an 8.7 per cent drop in the previous month.
Some analysts worry that the economic recovery will lose steam as a resurgence in coronavirus infections at home and abroad is expected to weigh on demand due to slowing corporate and consumer activity.
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Prime Minister Yoshihide Suga instructed his cabinet earlier this month to compile a package of stimulus measures to speed up the country’s economic recovery.
The package is expected to target structural changes, supporting environmental investment and boosting productivity through digitalisation.
Ruling party lawmakers have called for an extra budget worth around 20 trillion yen to 30 trillion yen (S$256.9 billion to S$385.3 billion), which will fund part of the stimulus package.
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