Situation
On a monthly basis Production dropped down to a -0.19% growth in Feb’07 ( -1.73% in Jan’07 )
On an annual basis Production grew by 3.96% p.a in Feb’07 ( 2.86% p.a in Jan’07 )
According to the Surveyof the Ministry of Economy,Trade and Industry, Production is expected to increase 1.5% in March and increase 1.3% in April.
This translates to a 5.32% p.a growth for March and a 5.27% p.a growth for April.
Conclusion ( click on image for a larger visual)
- IIP in Japan could range between a growth rate of 2.50% p.a and a 5.50 % p.a growth rate for the initial half of 2007. (In the last report on IIP - the expectation was a range between 2.50% and 5.00%)
- The initial growth can be expected to be towards the 5.00% - 5.50% p.a . Growth in New Orders for Jan’07 also seem to back this expectation.
- Post this IIP could drop to a 0.00% growth rate towards end 2007.
Note
The expected increase in production in Mar’07 may not be matched by increase in demand. (read :Japan - CPI continues its drops into negative territory in Feb’07)