Japan’s industrial production in July drops 1.5 percent due to chip shortage, pandemic in Asian countries

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TOKYO (XINHUA) – Japan’s industrial production declined 1.5 percent in July compared to the previous month as global chip shortages persisted and the COVID-19 situation disrupted parts supplies in other Asian countries, government data showed yesterday.

Japan’s Ministry of Economy, Trade and Industry (METI) said in a preliminary report that the seasonally adjusted index of production in factories and mines was 98.1 compared to the base value of 100 in 2015, after an upwardly revised increase of 6, 5 percent in June and a decrease of 6.5 percent in May.

In July, production in the automotive industry fell by 3.1 percent compared to the previous month, as passenger car production had declined, while production in the electrical machines and information and communication electronics sector fell by 3.4 percent as production of lithium Ion batteries and air conditioners was weak.

“Sectors are experiencing significant disruption in parts supplies, particularly from Southeast Asia, due to restrictions on economic activity,” a ministry official said, adding that automobile and air conditioning production is also happening affected by the shortage of chips.

However, the production machines area grew by 1.6 percent, as the demand for machines for manufacturing semiconductors rose sharply at home and abroad.

The ministry maintained its basic assessment of industrial production as “emerging”.

The index of industrial supplies fell by 0.6 percent to 96.1 and that of inventories by 0.6 percent to 95.1.

Looking ahead, the production of the manufacturers examined by the ministry is expected to increase by 3.4 percent in August and by one percent in September.

“Despite the decline this month, we expect production levels to remain relatively high,” said the ministry official. However, he added that the recent surge in COVID-19 infections in other Asian countries may not have been taken into account in the survey conducted in early August.


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