Transcript IPJapan

Japan Industrial Production
Published by: Ministry of Economy,
Trade and Industry (METI), Japan
Frequency: Monthly
Period Covered: Prior month
Volatility: Low
Market significance: Moderate
Web site:
http://www.meti.go.jp/english
Japan Industrial Production
What is it?
Measures output changes for the
industrial sector of the
economy.
Measures production, demand, and
the equipment needed for
production.
Tool for forecasting future GDP
and economic performance.
Used by central banks to measure
inflation.
Japan Industrial Production
What is it in the report?
4 Index’s:
Industrial
Production:
Value-added weight
Production-value
weight
Producer’s Inventory
of Finished Goods:
Shows the state of
product inventories
remaining with the
producer.
Producer’s Shipments:
Reveals the state of
transactions
(factory shipments)
at the level of the
producer
Producer’s Inventory
Ratio of Finished
Goods:
Provides direct view
of supply & demand
trends for products
Japan Industrial Production
Why is it important?
U.S. possess the largest and
most self-sufficient economy in
the world, thus, impervious to
the ups and downs of foreign
economic cycles.
Healthy domestic economic
performance depends on how well
other nations are doing.
Ranked 5th in the “Top Ten”
Intl. Economic Indicators.
Japan Industrial Production
Why is it important? (cont.)
Explain changes in GDP.
Highly sensitive to the business
cycle and can often predict
future changes in employment,
earnings and personal income.
Describes to what extent various
industries participating in the
pace of economics growth
changes.
Japan Industrial Production
Keys to Interpreting the Data
Be aware that a preliminary report is
published in the final week of the month
following the month being covered.
Notice that a revised report is released
two to three weeks later.
Indus. Prod. is expressed as percentage
of real output (adjusted for inflation)
relative to a base year.
Pay attention to percent change of the
level from month to month and how it
compares with the percent trend of the
economy at that time.
Japan Industrial Production
140.00
Historical Data
(Seasonally Adjusted)
120.00
100.00
80.00
Production/Inventory
Shipments
Inventory Ratio
60.00
40.00
Raw Data Obtained from METI
Statistics
20.00
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Ma 1
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Se 1
p01
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Ma 2
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Ma 5
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0.00
Japan Industrial Production
Recent Data Analysis I:
Changes in Production
 Production has decreased in March by 0.6%
from the previous month.
 Industries contributed to the decrease are:
 General machinery
 Electrical machinery
 Fabricated metals
Japan Industrial Production
Recent Data Analysis I:
Changes in Production (cont.)
 Commodities
contributed to the
decrease are:
 Semiconductor
products
machinery
 Cellular
telephones
 Reaction vessels
Japan Industrial Production
Recent Data Analysis II:
Production Forecast for Apr. & May
 According to the Survey
of Production Forecast in
Manufacturing, production
is expected to increase
by1.5% in April and 1.4% in
May.
 Industries that will
contribute to the increase
in April are:
 General machinery
 Electrical machinery
 Non-ferrous metals
Japan Industrial Production
Recent Data Analysis II:
Production Forecast for Apr. & May (cont.)
 Industries that will
contribute to the increase in
May are:
 Electronic parts and
devices
 Transport equipment
 Information and
communication
electronics equipment
Japan Industrial Production
Recent Data Analysis III:
Changes in Shipments
 Shipments in March decreased 1.5% from the
previous month.
 Industries contributed to the decrease are:
 General machinery
 Fabricated metals
 Electrical machinery
Japan Industrial Production
Recent Data Analysis IV:
Changes in Inventory
 Inventory in March
decreased 0.5% from the
previous month.
 Industries contributed to
the decrease are:
 Transport equipment
 Electrical machinery
 Textiles
 Inventory ratio increased
1.8% from previous month.
Japan Industrial Production
Recap of the Data Analysis
 Industrial production is on a moderately
upward trend.
 Production, shipments & inventory
decreased.
 Inventory ratio increased.
Japan Industrial Production
Recap of the Data Analysis (cont.)
 According to the Survey of Production
Forecast in Manufacturing, production is
expected to increase in April & May.
Japan Industrial Production
Latest Release
New Industrial Structure Report:
3 industrial groups
• Industries capable of surviving international
competition such as the fuel cell industry and
the digital consumer electronics industry
• Industries such as the health and welfare
devices and services industry that meet
market needs in keeping with social changes
while at the same time creating jobs
• Industrial clusters for regional revitalization
Japan Industrial Production
Latest Release (cont.)
Industrial clusters for regional revitalization:
• Advanced high-tech industry
• Development of new businesses in the
manufacturing industry
• Innovation in regional service industries
• High value-added food industry
This concludes our
presentation.
Presentation
completed by Amy
Au & Eunice Au