TOKYO – Japan’s factory output shrank at the fastest pace in eight months in January as shrinking overseas demand amid a global economic slowdown took a heavy toll on business activity.
Factory output fell 4.6 percent in January from a month earlier on a seasonally adjusted basis, government data showed on Tuesday. The contraction was much larger than economists’ median forecast of a 2.6- percent decline and followed an upwardly-revised 0.3 percent increase in December.
Output of auto products slumped 10.1 percent, dragging down the overall index. Outputs of items such as production machinery and electronic parts dropped 13.5 percent and 4.2 percent, respectively.
Manufacturers surveyed by the Ministry of Economy, Trade and Industry (METI) expect output to rise 8 percent in February and gain 0.7 percent in March, the data also showed, although the official poll tends to report an optimistic outlook.
Separate data showed Japanese retail sales rose 6.3 percent in January from a year earlier, beating a median market forecast for a 4- percent gain and posting an eleventh consecutive month of expansion.
Compared from the previous month, retail sales expanded 1.9 percent, the data showed.
Japan’s economy, the world’s third-largest, is expected to post an annualized 1.4 percent expansion in January-March according to a Reuters poll, after weaker-than-expected 0.6 percent growth in the final quarter of 2022.