MOSCOW (MRC) -- Japan’s factory output posted the biggest monthly drop in two years in May as China’s COVID-19 lockdowns and semiconductor and other parts shortages hit manufacturers, adding more pressure on an economy struggling to mount a strong recovery, said Reuters.
Japan's industrial output in May marked the steepest fall in two years, down 7.2 percent from the previous month, as the auto industry was hit by parts shortages due to a COVID-19 lockdown in Shanghai, government data showed Thursday. The seasonally adjusted index of production at factories and mines stood at 88.3 against the 2015 base of 100, the Ministry of Economy, Trade and Industry said. The decline followed a decrease of 1.5 percent in April.
With the sharpest fall since May 2020, the ministry also downgraded its basic assessment of industrial production for the second straight month to "weakening," compared with "was pausing" in April. "Many Japanese companies said they were affected more severely by the lockdown in Shanghai in May than in April," said a ministry official.
The ministry assumed logistics were disrupted for a full month in May, although the early part of April is believed to have escaped the lockdown's impact as some parts for manufacturers had already been shipped out when the measure was put in place in the Chinese commercial hub in late March.
Of the 15 industries covered by the survey, production in 13 declined. Automobile output dropped 8.0 percent from the previous month, including a 33.2 percent plunge in truck manufacturing, according to the data. Output of electronic components, such as lithium-ion batteries including those for automobiles, plummeted 11.3 percent and that of construction and production machinery fell 5.1 percent, the data showed.
Meanwhile, output of organic and inorganic chemical compounds rose 3.9 percent, and that of petroleum and coal products, such as diesel fuel and jet fuel, grew 8.9 percent. The index of industrial shipments declined 4.3 percent to 89.0, while that of inventories was down 0.1 percent at 98.5 for the third straight month of decline.
"We will continue to closely watch the effects of the development of coronavirus infections for domestic and overseas economies, shortages of parts, rising prices and the situation of Ukraine," the official said. Based on a poll of manufacturers, the ministry expects output to grow 12.0 percent in June and climb 2.5 percent in July.
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