Japan’s July factory output drops as virus take its toll on car production

31.08.2021 - Petr Mazaylo
Japan’s July factory output drops as virus take its toll on car production

Japan’s industrial output recorded a contraction in July following a COVID-19 blow on car production. The decline raised doubts about the country’s economic recovery.

Factory output declined 1.5% in July from the previous month due to a drop in auto production, including passenger cars and small buses.

The figure was better than a 2.5% dip projected in a Reuters survey of economists. However, it placed below pre-pandemic levels after soaring 6.5% in the previous month.

The decline outweighed the increase in output in production machinery items like those used for manufacturing semiconductors and electronic parts and devices.

A disruption in the supply of car parts in the region added to a problem in global chip scarcity after a surge in a more contagious Delta variant prompted Asian government to impose new lockdown restrictions.

A survey of manufacturers conducted by the Ministry of Economy, Trade and Industry (METI) showed an output forecast of 3.4% gain in August and 1.0% in September.

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