Japan’s factory output declines in november, led by auto production drops.

TOKYO (Reuters) – Japan witnessed a decline in factory output in November, primarily attributed to decreases in auto production, casting uncertainties over the prospects of the export-dependent economy.

Data from the Ministry of Economy, Trade and Industry (METI) revealed a 0.9% drop in industrial production in November compared to the previous month, a figure that surpassed the market’s median forecast, which had anticipated a 1.6% decline.

The decline in industrial output was driven by a 2.5% reduction in motor vehicle production, attributed to slowdowns in the manufacturing of small cars and engines. Additionally, output in electrical machinery and information and communication electronics equipment fell by 3.5%, influenced by sluggish demand in semiconductor and integrated-circuit testing equipment.

Manufacturers surveyed by the industry ministry anticipate a 6.0% increase in seasonally adjusted output for December but foresee a 7.2% decline in January. METI maintained its assessment of industrial output as “seesawing.” The ministry emphasized the need to monitor the global economic downturn and rising prices.

Furthermore, a production halt at Toyota Motor’s small car unit Daihatsu, due to a safety scandal, is expected to exert additional downward pressure on output from January onward, according to a METI official.

Japanese retail sales, however, expanded by 5.3% in November compared to the previous year, marking the 21st consecutive month of expansion. In contrast, retail sales experienced a 1.0% growth in November compared to October, following a 1.7% decline in October, as per separate data.