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Japan’s industrial production reaches worst level in two years amid lockdown measures

According to the Japanese Ministry of Economy, Trade and Industry (METI), Japanese industrial production fell in May by the most in two years. Industrial production came under pressure as measures were taken to curb COVID-19. In addition, shortages of semiconductors and other components have hit manufacturers, raising fears that the economy will struggle to recover.

The slump in industrial production in May underscores the challenge Japan faces in coping with supply bottlenecks. In addition, prices for raw materials and energy are consistently high.

Japanese industrial production decreased by 7.2% in May compared with the previous month. This was due to the sharp decline in output of certain product groups such as motor vehicles, including electrical and general machinery.

This is the largest monthly decline since May 2020’s 10.5% month-over-month drop.

The data came a day after Toyota Motor Corp, the world’s largest automaker by sales volume, said global vehicle production for May was below target. The company had already lowered its forecast earlier.

Toyota produced 634,940 vehicles worldwide in May. This is a decrease of 50,000 from the target of 750,000 in mid-April due to the epidemic control measures in Shanghai.

However, an opinion survey of manufacturers conducted by METI showed that manufacturers expect industrial production to recover by 12% in June and grow by 2.5% in July.

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