Japan's factory output skyrocketed in November, as supply chain bottlenecks eased globally. Increased production brightened prospects for a strong fourth-quarter economic rebound.
But persistent global semiconductor shortages and new risks from the Omicron coronavirus variant cast a cloud on improved manufacturing conditions.
Factory production gained 7.2% in November over October; the largest jump since 2013 when comparable data first became available. Experts attribute the increase to rising motor vehicles and plastic product production.
The November increase followed a 1.8% production increase in October and posted a faster rise than the 4.8% gain expected in a Reuters poll.
Data shows outputs of cars and other motor vehicles surged 43.1% in November, also a record, while plastic products production rose 9.5%.
Despite stronger output, Japanese automakers’ production still gets dragged down by persistent global parts and chip supply issues.
Before Christmas, Toyota Motor Corp announced plans to suspend production at five domestic factories in January due to supply issues and the health crisis.
Analysts also forecast prolonged impacts semiconductor chip shortages as chipmakers focus on producing cutting-edge semiconductors over the less advanced chips favored by vehicle manufacturers.
Manufacturers remain bullish that output will rise 1.6% in December and 5% in January. However, a Ministry of Economy, Trade and Industry (METI) official cautions that these forecasts may be overly optimistic.
Production of durable consumer goods rose 39%, while that of capital goods stayed steady in November.
A Reuters poll showed analysts expect Japan’s economy to grow an annualized 6.1% in the current quarter, rebounding from a third-quarter slump with consumer and corporate activity expected to recover.
The jobless rate rose to 2.8% from 2.7% in October, while an index gauging job availability sat at 1.15, unchanged from October.
