Industrial Production MoM

Industrial Production MoM measures Japan's monthly mining and manufacturing output under the official name Indices of Industrial Production. It is compiled by METI, the Ministry of Economy, Trade and Industry, from the monthly Current Survey of Production, which collects factory output quantities. It publishes 4 series: Production, Shipments, Inventories and Inventory Ratio. It is a Laspeyres-type index set to 100 in base year 2020 and excludes services, agriculture and construction.

Data cover output produced during the reference month, and the Preliminary Report lands around the end of the next month at 8:50 Tokyo time. The Revised Report follows about 2 to 3 weeks later at 13:30 Tokyo time, with dates shifting on holidays under a preset schedule. Each release shows the seasonally adjusted index with monthly change, contributors, assessment, forecast and downloads, while original values show annual change.

Preliminary values are replaced by fuller returns and seasonal factors revise yearly. The base year renews about every 5 years, and the revised report adds capacity and the operating ratio.

Output moves with the largest manufacturing groups by 2015-base weight, shown as a structural guide.

• Transport equipment (1796.5 of 10000): motor vehicles and other transport equipment output.
• General-purpose, production and business oriented machinery (1436.6 of 10000): industrial and business machinery output.
• Foods and tobacco (1313.8 of 10000): food and tobacco manufacturing output.
• Chemicals (1093.0 of 10000): chemical products output.
• Electrical machinery and information and communication electronics equipment (839.3 of 10000): electrical and communication electronics output.
• Other manufacturing (751.9 of 10000): remaining manufactures including textiles.

The preliminary report for January 2024 put Production at 97.6, down 7.5 percent on the month, led by motor vehicles after Daihatsu test scandal halts. The same release expected output to rise 4.8 percent in February 2024 and 2.0 percent in March 2024, led by transport equipment. The revised report put Production at 98.0, down 6.7 percent, and METI assessed production as fluctuating indecisively but weakened.

1. Item index: divide each item's output in month t by its base-year monthly average and multiply by 100.
2. Weighted average: weight each item by its base-year value-added share out of 10000, then average.
3. Monthly and annual change: monthly change divides the adjusted index move by the prior month; annual change uses the original index over 12 months.
4. Seasonal adjustment: METI uses X-12-ARIMA with log transform, model (2 1 0)(0 1 1), and trading-day, leap-year and holiday factors. Inventories and the inventory ratio use seasonal factors only.
5. Illustrative example: Item A has weight 6200 and base output 800; making 760 gives 95.0. Item B has weight 3800 and base output 500; making 525 gives 105.0. The combined index is 98.8, and against a prior 100.2 the monthly change is minus 1.4 percent.