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Japan’s auto production soars again, up 43%



New Subarus waiting for shipment this month in Kawasaki, Japan. (Beautiful pictures)

TOKYO – Japan’s factory output rose at its fastest pace on record in November, as the easing of bottlenecks in global supply chains helped lift auto production out of its recent slump, raising the prospect of strong economic recovery in the fourth quarter.

But while improved manufacturing conditions help policymakers ease the ongoing global shortage of semiconductors, new risks from the Omicron coronavirus variant are expected to cloud the outlook. of the world’s third largest economy.

Factory output rose 7.2% in November from the previous month, the biggest increase since 2013 when comparative data was first released, thanks to increased output of motor vehicles and plastic products. .

That means output rose for a second straight month after surging 1.8 percent in October and faster than the 4.8 percent gain expected in a Reuters poll.

Takeshi Minami, chief economist at Norinchukin Research Institute, said: “Output rebounded as before as car production recovered.

“But from a global perspective, supply bottlenecks and especially lack of chips is likely to be prolonged, which will slow down the recovery rate of output. “

The data showed that output of automobiles and other motor vehicles increased by 43.1% month-on-month in November, also a record, while plastic product output increased by 9.5%.

Despite the stronger output increase, Japanese automakers still cannot fully escape the drag from problems related to the global supply of chips and components.

Japan’s leading car manufacturer Toyota Motor Corp last week said it would suspend production at five domestic factories in January due to supply issues and the health crisis.

Analysts say the auto sector could take a prolonged hit from chip supply as chipmakers focus on making advanced semiconductors rather than less advanced chips.

“What is needed for cars is not cutting-edge chips,” said Chihiro Ohta, general manager of investment research and investor services at SMBC Nikko Securities. “They need the older generation models.”

Manufacturers expect output to grow 1.6% in December and 5.0% in January.

However, an official from the Ministry of Economy, Trade and Industry (METI) warned that forecasts of companies in the monthly survey tend to be overly optimistic.

Output of consumer durables increased 39%, while output of capital goods, which analysts say is closely related to the capital expenditure component of gross domestic product (GDP), remained unchanged. compared with the previous month.

More broadly, analysts expect the Japanese economy to grow 6.1% year-on-year in the current quarter, recovering from a third-quarter contraction with consumer and business activity expected. will recover, a Reuters poll showed this month.

Separate data on Tuesday showed the unemployment rate rose to 2.8% from 2.7% the previous month, while the job availability gauge came in at 1.15, not change from October.



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