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Japan's factory production shows first sign of recovery | |
(40 minutes later) | |
Japan's industrial output continues to be battered by the after effects of the earthquake and tsunami. | Japan's industrial output continues to be battered by the after effects of the earthquake and tsunami. |
However, the latest government figures indicate that manufacturing is showing its first signs of recovery. | |
Factory output rose by 1% in April from the previous month as companies worked towards dealing with problems in supply chain disruption. | |
On an annual basis, output dipped by 14% in April. | |
Analysts say the latest figures indicate that things are improving for the manufacturers. | |
"From May a V-shaped recovery may start and it may keep rising through July and August," said Kyohei Morita of Barclays Capital. | |
Yoshimasa Maruyama of Itochu Economic Research Institute added that given the speed of recovery Japanese industrial output could return to normal levels faster than expected. | |
"If we continue at this pace I think we will return to pre-quake production levels by about August or September," he said. | |
'Biggest factor' | 'Biggest factor' |
One of the hardest hit sectors has been Japanese car manufacturing. | One of the hardest hit sectors has been Japanese car manufacturing. |
Carmakers usually do not stockpile a large inventory of parts, so when the earthquake and tsunami damaged supply chains, car makers in Japan had to suspend production. | Carmakers usually do not stockpile a large inventory of parts, so when the earthquake and tsunami damaged supply chains, car makers in Japan had to suspend production. |
Earlier this week Toyota Motors said production at its Japanese factories was down by 74.5% in April compared to last year. | Earlier this week Toyota Motors said production at its Japanese factories was down by 74.5% in April compared to last year. |
Honda reported a decline of 81%, while Nissan said its domestic factories produced 48.7% fewer cars in April. | Honda reported a decline of 81%, while Nissan said its domestic factories produced 48.7% fewer cars in April. |
Analysts said a rebound in car manufacturing is key for Japan's factory output to get back to pre-quake levels. | |
"The forecasts are for big rises (in industrial output) in May and June," Mr Maruyama said. | |
"The biggest factor here is the auto industry. It's factoring in a greatly improved outlook for car production," he added. | "The biggest factor here is the auto industry. It's factoring in a greatly improved outlook for car production," he added. |