Semiconductor Supply Shortage Hits Japanese Economy... Industrial Production Down 3.2% in August (Comprehensive)

"Industrial Production Outlook Downgraded to 'Sideways'"
First Retail Sales Decline in 6 Months... 3.2%↓
"Impact of COVID-19 Resurgence"

[Image source=AP Yonhap News]

[Asia Economy Reporter Kim Suhwan] Japan's industrial production in August fell by 3.2% compared to the previous month. The main cause is analyzed to be the sharp decline in automobile and electronic machinery production in Japan due to the ongoing semiconductor supply shortage.

On the 30th, Japan's Ministry of Economy, Trade and Industry announced that Japan's industrial production in August fell by 3.2% compared to the previous month. This figure is a larger drop than the market expectation of a 0.5% decline.

This marks the second consecutive month of decline. In July, industrial production had fallen by 1.5% compared to the previous month.

Earlier, major automobile manufacturers such as Toyota, Nissan, and Honda experienced semiconductor inventory shortages starting last month, leading to reduced production. The industry expects automobile production issues to continue until October.

Specifically, automobile production sharply decreased by 15.2% compared to the previous month, leading the contraction in industrial production.

Recently, the rapid spread of the Delta variant in Southeast Asia has made raw material procurement more difficult, also affecting the reduction in industrial production.

The Ministry of Economy, Trade and Industry downgraded its previous forecast of industrial production turning upward, now assessing it to remain flat.

Along with this, retail sales also appeared to have contracted.

According to the Ministry of Economy, Trade and Industry, Japan's retail sales in August fell by 3.2% compared to the previous month, a larger drop than the forecasted 1% decline.

This is the first decline in six months. It is analyzed that consumer sentiment has also weakened due to the resurgence of COVID-19.

Meanwhile, analysts forecast Japan's third-quarter economic growth rate at 1.2%.

This content was produced with the assistance of AI translation services.