Industrial production fell to its lowest level in seven months in October, weighed down by slower exports and global inventory adjustments in the information technology sector, the Ministry of Economy, Trade and Industry said Tuesday.
The index of output at mines and factories dropped a seasonally adjusted 1.6 percent in October from the previous month to 98.8, the lowest since the March reading of 97.8, the ministry said in a preliminary report. It followed a drop of a revised 0.4 percent in September.
The figures are against the base of 100 for 2000.
METI left its overall assessments in the nation's industrial output unchanged from September, calling it "flat."
Some private-sector economists shared the ministry's view, saying that despite the continuing IT-related inventory adjustments, pickups in domestic demand are likely to limit falls in Japan's industrial output.
"Industrial production is expected to zigzag in the coming months, given solid domestic demand," said Hitoshi Asaoka, an economist at Mitsubishi Research Institute Inc.
"We are closely watching U.S. consumption during the Christmas shopping season and demand in China and other Asian economies, which could determine the course of Japan's production and overall economy," he said.
Finance Minister Sadakazu Tanigaki downplayed the significance of the output index's falls both in September and October.
"The falls were part of adjustments being made against the background of the ongoing moderate recovery of the economy," Tanigaki told reporters. "Generally speaking, the effects of improved corporate earnings are being felt in personal spending."
Households buy more
Spending by wage-earning households inched up a real 0.1 percent in October from a year earlier, reflecting in part an increase in medical and educational expenditures, the government said Tuesday.
Average monthly spending by salaried workers' households came to 324,273 yen, up for the second consecutive month, the Internal Affairs and Communications Ministry said in a preliminary report.
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