Japan’s industrial output rose in October over the previous month, which could give much-needed support to the faltering economy.
According to data released Friday by the Ministry of Economy, Trade and Industry, Japan’s industrial production, which measures the total inflation-adjusted value of output from manufacturers, mines, and utilities, rose 1.8 percent in October compared to September while it declined 4.1 percent in September. Analysts had expected a decrease of 2.2 percent.
Japan’s manufacturing activity contracted in November, however, to a 19-month low, increasing concerns about a slowdown.
According to data released by Markit/JMMA Friday, the headline Purchasing Managers’ Index fell to 46.5 in November, down from 46.9 in October. Any number below 50 indicates an economic contraction. The continued shrinking of manufacturing activity would increase likelihood of a sharp contraction in the economy.
This comes after Japan reported earlier this week that retail sales fell in October compared to the same month last year, indicating a faltering of consumer spending, which accounts for the majority of overall economic activity.
The data released Thursday by the Ministry of Economy, Trade and Industry shows that Japan’s retail sales, which measure the total value of inflation-adjusted sales at the retail level, fell 1.2 percent in October from the same month a year earlier, down from a 0.4 percent rise in September.
There were fears of sharp economic slowdown as Japan's gross domestic product contracted in the third quarter from the previous quarter due to soft global demand and weakening domestic consumption. Japan’s GDP shrank to 0.9 percent in the quarter ending Sept. 30, down from a 0.1 percent rise in the previous three months.
The continuing debt crisis in Europe and the strength of the yen have also hurt the demand for exports, the key driver of Japan's economy. Investors feel an urgent need for policymakers to take measures for enhancing the growth potential of the economy, which many expect after the election in December.