News

Japan industrial output lags forecasts; retail spending falls

TOKYO – Japanese industrial output rose 1.4 per cent in October from the month before, below forecasts and a decrease from the year before.

Government data released Monday also showed retail spending fell in October from a year earlier.

The slowdown in China has reverberated in neighbouring Japan, the world’s third-largest economy, which fell back into recession during the summer, contracting 0.8 per cent in the July-September quarter.

But industrial output rose month-on-month in both September and October, suggesting the recession may be short lived, Marcel Thieliant of Capital Economics said in a research note.

“The second straight rise in industrial production indicates that the economy returned to growth this quarter following two straight contractions in output,” he said.

The government said last week it will draft a supplementary budget and provide cash handouts to pensioners to counter weak demand.

Factory output fell 1.4 per cent in October from a year earlier as production of chemicals, nonferrous metals and telecoms equipment dropped.

But manufacturers increased production of cars, machinery and electronics components, major drivers of growth for Japan.