Japan Industrial Output: Updated October 13, 2024

 

Japan's industrial output in August falls 3.3% due to typhoon

Article Source:  https://mainichi.jp/english/articles/20240930/p2g/00m/0bu/009000c

Ideas:

There are always going to disruptions in production due to many factors, such the recent chip shortages, the logistics challenges during the pandemic, weather factors, the Toyota quality control situation, and many other factors.

The reading of 99.7 is still very good as you can't put too much stock in index numbers as there are many factors that go into an index number.

Summer and early fall it the typhoon season in Japan so weather is going to have affect on many different sectors in Japan. 

Fluctuating indecisively is a good way to describe the situation for the summer months, and all of the challenges Japan production has had since the pandemic with chip shortages, slow down related to the pandemic, the Toyota situation and quality control, the weather, and there are the usual shutdowns to to maintenance and repairs.

Yes, it is very difficult to exactly predict the future and have exact estimates about how much can be produced in the months ahead, as there are always going to be unsuspected challenges in the future.

Companies obviously should have built in periods for many of the factors that could cause delays in production and should not expect perfect production schedules and there just too many challenges can disrupt as schedule.

Again, typhoons are a major factor in Japan and always will be and should be part of the suggested flexible schedule that might be one many factors that can disrupt production.

Of the 15 industrial categories, 12 saw declines in output, which might be considered normal as again many factors can reduce output, especially during the summer and winter.

It would be interesting to see how many of the 15 industrial categories had contingency plans or flexible plans which allows for the unsuspected shutdowns throughout the year.

Not all of the categories or sectors are located in the same areas of Japan as maybe they are spread out all over Japan, and as such, maybe the typhoons, didn't affect a large affect on some categories.

Japan is a major producer of electronic parts and of course auto parts, so maybe those categories were not affected that much. And many of the parts producers, both electronic and auto, are not really related to any major Japanese company, as many of these companies are medium and small size companies.

And of course many of these mid-size and small companies are suppliers to the larger Japanese companies, and as an example, many of the companies were started by former large company employees, which the large company helped them step-up the supplier company.

The decrease in industrial shipments again could be typhoon related as ships could't get in or out due the inclement weather in Japan during the typhoon season.

The decrease in inventories too might have been related to a reduction of production days due the inclement weather in Japan. 

September is still the typhoon season in Japan and there is always the chance for more typhoons.

October is usually a more calmer month with almost no typhoon in October, so production should get back to the normal range.

Have a nice day!