Japan and China’s manufacturing activities are taking the hit from the worldwide shortage of semiconductors, with both countries reporting declines that might compromise their nascent recoveries.
Japan recorded the steepest fall in industrial production in May, with a sharp fall in car manufacturing due notably to the persistent world shortage of semiconductors, official numbers showed on Wednesday.
Factory output fell 5.9% in May, the Ministry of Economy, Trade and Industry (METI) said – more than double the 2.4% forecast by a Reuters poll of analysts, after an increase of 2.9% the month before. Motor vehicle production fell 19.4% the same month.
The bad economic news come a few weeks before the opening of the Olympics in Tokyo, due to start on July 23 after being delayed by a year.
Activity for the private sector as a whole contracted for a second straight month due to the weaker reading for manufacturing and continued shrinking in the services sector, clouding the outlook for second-quarter economic growth in the country.
Honda Motor has become the first of Japan’s automakers to state publicly it will phase out sales of gasoline-powered cars completely, setting 2040 as the goal and giving newly minted Chief Executive Officer Toshihiro Mibe a once-in-a-career chance to put his stamp on a firm that can trace its lineage back 84 years.
The Japanese government is allowing its biggest corporate brand names and employers like Toyota Motor Corp., SoftBank Group Corp., and Nomura Holdings Inc. to administer shots to their own employees within office premises from Monday.