Japan’s factory output growth slumps in April, casts doubt on quick recovery

A worker walks near a factory at the Keihin industrial zone in Kawasaki, Japan, March 8, 2017. REUTERS/Toru Hanai

TOKYO (Reuters) – Japan’s industrial output rose less than expected in April and inventories of electronic parts rose, a sign that the economy may be struggling to shake off a first quarter contraction.

Industrial output rose just 0.3 percent in April from the previous month, official data showed on Thursday, well below the median forecast for a 1.2 percent increase and a 1.4 percent rise in March.

Much of the slowdown was due to a 5.6 percent decline in production of electronic parts while inventories rose for a third straight month, adding to fears of weakening overseas demand.

On the positive side, production of cars and machines used in factories accelerated in April.

Manufacturers surveyed by the Ministry of Economy, Trade and Industry expected output to rise 0.3 percent in May but to fall 0.8 percent in June.

Japan’s economy contracted in the first quarter as weak investment, consumption and exports took their toll, with Thursday’s output data and forecasts adding to concerns over how quickly the economy can return to growth.