Japan Nov. Industrial Output: Updated March 1, 2024.

 

Japan's Nov. industrial output falls 0.9% on weak auto output

Article Source:  https://mainichi.jp/english/articles/20231228/p2g/00m/0bu/026000c

Ideas:

A decrease of 0.9 percent is not that big of a decrease unless you are obsessed with perfect numbers or statistics and there always has to be positive increases.

It could easily be a margin of error related statistical reporting either up or down. Many times the reporting agency will come back with a revised number either up or down.

The index still is at 104 to the base of 100, which shows tat industrial output is still positive in Japan. And as we see there was 1.3 percent increase in October, but again, numbers can change as new or relevant data is found.

The idea that industrial output fluctuates indecisively just shows how volatiles indexes can be as maybe there is not real reason for the fluctuations, other than factories shutdowns, material shortage, supply chain challenges and so on.

The 15 sectors mentioned probably will never all be positive, as just like an economy with different sectors, and also with different companies, there are going to be some who do better than others in output and growth.

The auto industry maybe was hampered with the Toyota Daihatsu situation and the not so good reporting of quality testing. 

For example, as mentioned, Daihatsu specializes in small passenger vehicles and even produces some Toyota models at their Daihatsu plants.

Daihatsu is subsidiary of Toyota and produces its own line of cars under the Daihatsu name, as they are part of the Toyota group of companies.

Once again, maybe Japan has not yet overcome the electronic component and chip shortage that been a challenge now for the past three years.

Again, some production sectors saw increases and some saw decreases, which is common among many sectors.

Semiconductors should be a major economic driver in the the present and in the future, as every electrical machine now uses some kind of semiconductors to function.

An economic driver is a product or sectors that significantly affects economic growth such a the Japanese car production industry and now even the semiconductor industry.

As mentioned before, Daihatsu has had some safety testing issues and the decided, maybe with pressure from the Toyota group to halt production at this time.

This might have had an effect on the overall car production in Japan as maybe there were less cars produced.

Again a drop of 1.3 percent is not that big a deal, as again it easily be in the margin of error in statistical reporting.

Any time there is an increase in inventories that could mean a drop in demand, and error in estimating demand for the future and so on.

A poll like a survey about the future is just a guess, and companies really don't know exactly what is going to happen until production begins and demand is determined.

Capital investment, sometimes, can be very seasonal, meaning they don't happen every week or every month, or even every quarter, as companies decide the best time for them invest in capital investments.

Interest rates in the US has not happened in recent months as the US Federal Reserve has not increased the rate for a few months, and plans to reduce the key rate sometime in 2024.

China is different situation, as it might be going through a period of restructuring, after growing very fast for many years, if not decades.

Perhaps, now, it has reached the stage like Japan and South Korea, and grew too fast without keeping the fundamental foundations for the future.

Have a nice day and be safe!