Japanese Industrial Production Stalls and Inventories Continue to Decline

The rise in industrial production in Japan which began in early 2002 appears to have stalled. Since last August, the index has ranged from 99.1 to 96.9 (1995=100) and in February was only 97.0. The decline from January to February for the total index was 2.1%. The index for finished goods declined by 3.2% and that for intermediate goods by 0.8%.

Producers’ shipments have generally risen and fallen at the same pace as production, but in recent months, they have tended rise faster than production. As a result, even though shipments declined in February, inventories continued to decline sharply and are now at the lowest levels of the past fourteen years.