Economy56 minutes ago (Jun 29, 2021 10:07PM ET)
© Reuters. FILE PHOTO: Smoke rises from a factory during the sunset at Keihin industrial zone in Kawasaki, Japan, January 16, 2017. REUTERS/Toru Hanai/File Photo
By Daniel Leussink
TOKYO (Reuters) -Japan’s industrial output posted the biggest monthly drop in a year in May, as a sharp fall in car production threatened to undermine the country’s economic recovery just weeks before Tokyo is set to host the Olympic Games.
The world’s third-largest economy will likely grow at a much slower pace than initially thought in the current quarter in part due to weakness in consumer spending, a poll by economists showed this month.
Factory output slumped 5.9% in May from the previous month, official data showed on Wednesday, hit by declines in the manufacturing of cars and production machinery to post its largest monthly drop since May last year.
The contraction, which was the first drop in three months, was much weaker than a 2.4% fall forecast in a Reuters poll of economists. It followed a 2.9% gain in the previous month.
Output was weighed by a 19.4% drop in motor vehicle production, largely due to supply issues with semiconductor chips, the Ministry of Economy, Trade