TOKYO- Japan’s industrial output fell for a fourth straight month in May to the lowest level since the global financial crisis, underscoring the widespread impact of the coronavirus on factory activity and the overall business and consumer outlook.
The world’s third-largest economy is bracing for its worst postwar recession, hurt by coronavirus lockdown measures at home and overseas that have upended supply chains, kept businesses shut and depressed consumer spending.
Ministry of Economy, Trade and Industry (METI) data out on Tuesday showed that factory output fell 8.4 percent month-on-month in May to 79.1, a level not seen since March 2009 when the financial crisis sapped global demand.
“The economy likely suffered a big contraction in April-June due to weak domestic and external demand,” said Taro Saito, executive research fellow at NLI Research Institute.
“Domestic demand may look up from June, but exports will remain very weak, putting a drag on overall economic recovery,” he said, adding that the worsening of the economy would flow on to the labor market.
Cars, production machinery, steel and other broad industries were hit hard by slumping demand at home and abroad due to the pandemic. None of the industries surveyed posted an increase in output.
The output slump followed a 9.8 percent decline in the previous month, and was much bigger than the median market forecast of a 5.6 percent drop in a Reuters poll of economists, the data showed.
On a positive note, manufacturers surveyed by METI expect output to rise 5.7 percent in June and 9.2 percent in July.
The government, however, left its assessment of industrial production unchanged, saying it was “lowering sharply”, the bleakest official view since the global financial crisis in late 2008. — Reuters
