Japan Industrial Output:

 Article Source:  https://mainichi.jp/english/articles/20220228/p2g/00m/0bu/028000c

Article:

TOKYO (Kyodo) -- Japan's industrial output fell 1.3 percent in January from the previous month for the second straight month of decline due to disruptions in the supply of semiconductors and other parts amid the coronavirus pandemic, government data showed Monday.

The seasonally adjusted index of production at factories and mines stood at 95.2 against the 2015 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report. The result followed a 1.0 percent drop in December.

The ministry, however, retained its assessment of the data for the third consecutive month, saying output at factories and mines is showing signs of picking up on the back of a bright outlook for the near future.

Ideas:

Most likely there are going to be supply distruptions for a while. So companies need to adjust their production schedules and maybe learn to be more flexible.

It should be remembered that an economy is very complex, and as such not all companies might be experiencing the same level of problems, or not all companies might not experience the same level of challenges as some companies.

So we need to be careful that we don't paint all companies as having the same level of problems as other companies. And not think all companies are coming out of the pandemic, as again an economy is very complex meaning there companies that are doing very good, some that are just OK, and some might have some serious challenges.

Article:

By component, production in the auto industry marked the biggest drop of 17.2 percent, as the proliferation of the Omicron variant across the country caused disruption in domestic supply chains, a ministry official said.

Output in organic and inorganic chemicals also dipped 3.8 percent as the pandemic and an earthquake with a magnitude of 6.6 in southwestern Japan forced some plants to halt production in the reporting month.

For the upcoming months, the official said that "the coronavirus related situation and (the ongoing conflict in) Ukraine is likely to affect output," without providing further explanation.

Ideas:

Different sectors might be experiencing different levels of disruptions. But maybe even within different sectors there might be different levels of disrupdtions depending on the strength or weaknesses of a company's supply chain or supply chains.

By now, going into the third year of the pandemic, you would think that companies have been able to diversify their supply chains so that they don't experience a lot of supply chain challenges.

Of course no company could have predicted the latest earthquake and as such natural disasters are sometimes very difficult to plan around or overcome. 

Article:

On Thursday, Russia invaded Ukraine following a months-long military buildup on the border, prompting the United States, Japan and Europe to impose sanctions against Moscow, such as excluding some Russian banks from a key international payment system known as SWIFT, as well as freezing assets held by Russian President Vladimir Putin and other Russian government officials.

In the reporting month, the index of industrial shipments decreased 1.8 percent to 93.7 while that of inventories was down 1.8 percent at 99.0.

Based on a poll of manufacturers, the ministry expects output to rise 5.7 percent in February and edge up 0.1 percent in March.

Ideas:

The Ukraine war situation is going to effect many countries globally related to food prices, oil and gas prices along with the continuing shipping challenges are probably only to get worse over the next few weeks, months, or even years.

So we have had the continued pandemic and now we've got the war sitiuation which is going to effect all of the present challenges, increasing in food prices, increases in energy prices, and increases in shipping prices and shipping times.

Output might increase overall but again that doesn't mean all companies might not have the same level of output because of different challenges in different sectors and in the overall economy.

So it might not be the best time to say all is well just yet, and so maybe we are again heading into a "new normal" which now includes the war situation and not just the pandemic.

Have a nice day and be safe!