Japan's Oct. industrial output rises A1.0% on month
TOKYO (Kyodo) -- Japan's industrial output in October expanded 1.0 percent from the previous month, rising for the second consecutive month, supported by a recovery of memory chip production, government data showed Thursday.
The seasonally adjusted index of production at factories and mines stood at 104.6 against the 2020 base of 100, the Ministry of Economy, Trade and Industry said in a preliminary report. The rise followed an upwardly revised 0.5 percent increase in September.
The ministry maintained its basic assessment of industrial output since July, saying it "fluctuates indecisively."
Ideas:
It fluctuates indecisively" is most like a very good idea as with many indexes, there is usually not a linear straight line of continued growth. There are going to be stops and starts due to supply chain challenges among other things.
The memory chip production, was for many months, maybe even years, challenged due to supply problems, factory problems with covid, and so on.
A reading of 104.6 related to base of 100 really doesn't say that much other than maybe industrial production has improved recently.
The real test will be what is going to happen after one year, or one year of production that doesn't have any supply chain challenges, like the past few years.
Article:
Of the 15 sectors covered by the survey, 10 reported increased production while five logged declines.
Among the 10, electronic parts and devices contributed the most to the output increase in the month, up 6.6 percent, led by memory chips widely used in personal computers and smartphones.
A ministry official noted, however, that output of semiconductors remained relatively low over a three-month period.
Ideas:
The 15 sectors tat were covered in the survey, are like a market economy, in that there are always going to be some doing better than some others.
For 15 sectors to be positive in growth might not ever happen as some have excellent growth and some go through periods of challenges or even restructuring.
Memory chips are used in almost everything electronic these days. Unfortunately, compared to Taiwan and South Korea, and maybe even China, now, Japan has fallen behind in the production of memory chips.
As competitive as Japan its not understood how Japan has fallen so far behind is such an important global commodity as memory chips.
But at the same time, sectors go through ups and downs, as new global players, competitors enter the market, such as Japanese ship building, which used to be the leader in building container ships, but now China and South Korea have overtaken Japan and Japan might not even be in the top 5 anymore.
Article:
Motor vehicles also contributed significantly to the overall production increase in October, rising 2.0 percent due to strong compact and mini vehicle output, data showed.
Meanwhile, an output disruption at domestic production lines of Toyota Motor Corp. in October affected overall motor vehicle output, with that of regular-sized cars dropping 4.0 percent, the official said.
Among the five sectors logging production declines, iron, steel and non-ferrous metals fell 1.1 percent, dragged down by special hot-rolled steel.
Ideas:
Japanese cars, produced in Japan, are an economic driver, meaning they significantly increase economic growth, as exports are usually very good to the US.
But at the same time, Toyota has recently had some supply challenges and sometimes has to shutdown it productions lines to correct any challenges and or fix supply challenges.
Japan car production is more than the normal regular-sized cars, as there is a strong component of compact and mini vehicle productions that are exports or produced in many Asian countries.
Again not all sectors improve or grow the same as some go through market challenges related to market demands, market supply challenges and so on.
Article:
Output of petroleum and coal products dropped 2.7 percent, with a relatively warm winter expected.
The index of industrial shipments climbed 0.2 percent to 103.6, up for the second straight month, while that of inventories rose 0.8 percent to 104.4 for the first increase in three months.
Ideas:
Weather always play an important part in an economy, such as cold and warm growing seasons, too much or not enough rain, and even warm winters which might affect the demand for oil and coal products.
And of course, for example Uniqlo, which always has a lot of heat tek products for winter buying, but it the winter in Japan has been relatively warm, it might mean shoppers might not buy as much in winter clothing as before.
The increase or decrease in inventories might mean that demand for some products are down and or demand for some products have exceeded estimates.
An increase of 0.2 percent is not that much to get excited about as its possible. the margin of error could revise the number up or down.
Article:
Based on a poll of manufacturers, the ministry expects production to decline 0.3 percent in November and expand 3.2 percent in December.
The ministry official said the government is continuing to keep a close eye on downside risks overseas as higher interest rates could dampen capital investment and consumption.
Ideas:
As normal, production is never linear, as there are months of positive growth and months of not so good growth.
The key is not to focus on monthly numbers but to focus more on quarterly numbers and or yearly totals, which give a more clear pictures of what is happening.
In the US, even though interest rates are still high, the US Federal Reserve has said, as the US economy is now much stronger, and inflation is now only around 2 percent, they are going to reduce the key rate a few times starting in the spring.
The US economy seems to be, again, leading the advanced economies in growth, as many economies such as Germany and the EU seems to still be struggling. Not to mention China, which still has its own domestic challenges.
Have a nice day and be safe!
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