Japan factory output rises again in February

AP News
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Posted: Mar 29, 2011 10:09 PM
Japan factory output rises again in February

Japan's industrial production climbed for the fourth straight month in February, but the government warned Wednesday output would plunge in the coming months due to production and supply disruptions following the March 11 tsunami disaster.

Factory output, a key measure of overall economic activity, rose 0.4 percent from January on the back of strong demand for cars and machinery, the Ministry of Economy, Trade and Industry said.

The February result was better than an average market forecast of a 0.1 percent decline by the Kyodo News agency.

But the government warned that Japanese industrial production would fall sharply in the coming months due to the March 11 earthquake and tsunami, which decimated much of northern Japan, crippling production and supply chains.

"The earthquake and tsunami destroyed factories and totally crippled production and supply operations. We are very certain that industrial output in March and April will plunge," said ministry official Naoki Tamura.

The ministry has yet to release projected output data following the March 11 disaster, he said.

But economist Hiroshi Watanabe from private economic think tank Daiwa Institute of Research said Japan's industrial production in March could drop 10 percent from a month earlier.

"Production has simply stopped since the earthquake. Many factories cannot operate due to enormous damage after the quake and tsunami," Watanabe said.

Since the disaster, many major Japanese companies, including Toyota Motor Corp. and Sony Corp., have been forced to suspend production due to a shortage of components.

Toyota, the world's No. 1 carmaker, halted its entire auto output in Japan from March 14 to 26 _ a production loss of 140,000 cars.