Japan's Industrial Output: Updated Dec. 17

 https://mainichi.jp/english/articles/20211130/p2g/00m/0bu/039000c

Article:

TOKYO (Kyodo) -- Japan's industrial output in October rose 1.1 percent from the previous month for the first increase in four months on the back of increased production by the automobile and machinery industries, government data showed Tuesday.

The seasonally adjusted index of production at factories and mines stood at 90.5 against the 2015 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report.

The ministry, however, retained its basic assessment since August that industrial production "is pausing."

Ideas:

The Japanese economy, like any economy, always goes through periods of positives and negatives and rarely is there an economy or sectors in an economy that have all positives or even all negatives as the business cycle is full of positives, negatives, and even periods of pausing and slowing down.

Manufacturing is a very important part of the Japanese economy but it must be remembered that its not the entire Japanese economy. While being very important, most likely in the 21st century the services economy might actually be bigger. 

In terms of economic activity the manufacturing sector is still a large part, but overall, most likely the service sector or sectors, as there many different part so the service sector might actually be much bigger.

Japan has always considered itself a manufacturing power, which it is, but more importantly now might be the service or a better term might be the services sector, as it involves many different kinds of businesses.

Article:

Among the eight industries marking month-on-month growth, production rose 15.4 percent for automobiles and 4.2 percent for production machinery including semiconductor manufacturing equipment.

"Due to an easing of materials and parts shortages, output in October turned upward," a METI official said.

Among the six industries logging a decrease in production, inorganic and organic chemicals posted a 3.3 percent contraction.

Ideas:

And even in the manufacturing sector there are many different kinds of manufacturing companies. As such there are always going to be some that see production increasing and some that see production slowing down, and some that might be production decreasing from the previous year. 

Again even the manufacturing industry goes through business cycles of positives and negatives. So whenever the index numbers are presented they have to be taken with a "grain of salt" meaning in this case it doesn't mean every company was positive or every company was negative of even every company saw production slowing down or pausing.

Just like the overall economy, there are some areas that are positive and some that are negative and nothing ever stands still. 

And as the pandemic continues on globally and in Japan most likely, even the manufacturing industry which come back much faster the the services area, is still going to see periods of pausing and periods of not what it should be still as the pandemic related situations will continue to affect many different industries most likely well into 2022.

Article:

Looking ahead, METI expects output to grow 9.0 percent in November and 2.1 percent in December, citing a poll of manufacturers.

The official also said the Omicron variant of the coronavirus seems to have had no impact on production so far but that it is unclear how it will affect output in December and beyond.

The official said it is necessary to monitor the variant's possible influence on supply of parts and materials, among other factors.

The index of industrial shipments increased 2.0 percent to 88.3 while that of inventories was up 0.8 percent at 98.9, according to the data.

Ideas:

The pandemic and the omicron situation is a area of concern for manufacturing just like the delta variant was in the summer. Who knows what can happen with the new variant related to affecting supply chains, shipping and manufacturing companies in Southeast Asia. 

Now is not the time to say all is well and just like what happened in the summer the pandemic variants can strike and again cause major disruptions in global supply chains.

For example, an immigration official at the Kansai international airport, who had no contact with anyone flying into the country contacted the omicron variant. So who knows right now who exactly is safe and how fast or how it spreads can most likely easily do what the delta variant did in the summer.

As such global manufacturing and global supply chains again might affected just like they were in the summer.

Have a nice day and be safe!