Industrial output in Japan was down 9.6 percent in December compared to the previous month, the Ministry of Economy, Trade and Industry said on Friday, posting an index score of 84.6 and marking the statistic's largest monthly decline since Tokyo began measuring such data in 1953.
That was below analyst expectations for a 9.1 percent decline after the 8.5 percent monthly fall in November.
On an annual basis, output plummeted 20.6 percent - even worse than forecasts that had called for a 20 percent annual decline. Industrial production was off 16.6 percent on year in November.
Commenting on the data, Economics Minister Kaoru Yosano said at a press conference that Japan had never before seen such a decline in production.
"The problem is very serious," he said. "We haven't experienced such a sharp fall (in industrial output) in the past. This drop is likely to continue."
For the fourth quarter of 2008, industrial production fell 11.9 percent compared to Q3, marking the fourth straight quarter of contraction. That also was the largest decline on record - although the METI predicts that Q1 of 2009 could see a 20.3 percent contraction. The government's survey predicted further declines of 9.1 percent in January and 4.7 percent in February.
Shipments in December decreased 8.0 percent from the previous month, showing a decrease for the third consecutive month. It showed a decrease of 20.5 percent from the previous year. The index in December was a seasonally adjusted 86.0.
Inventory in December increased 0.1 percent from the previous month, up 4.7 percent on year and for the fourth consecutive month. The index in December was a seasonally adjusted 110.5.
For all of 2008, industrial production was off 3.4 percent - declining for the first time in six years.
Among other data released Friday in Japan:
• The nation's seasonally adjusted jobless rate hit 4.4 percent in December, the Ministry of Health, Labor and Welfare said - worse than analyst expectations of 4.2 percent following the 3.9 percent rate in November. December's jobs-to-applicants ratio was 0.72, meaning there were 72 available jobs for every 100 applicants - slightly worse than the prediction of 0.73 after coming in at 0.76 in November.
• Activity in Japan's manufacturing sector contracted in January for the 11th straight month, according to the latest survey from Nomura Holdings and the JMMA. The group's Purchasing Managers Index dropped to a seven-year low of 29.6 in January, down from 30.8 in December and lower than the 50.0 reading that separates contraction in the sector from expansion. The figure was the lowest since Japan's recession in December 2001.
• Household spending was down 4.6 percent on year - well below analyst expectations for a 3.6 percent annual contraction. Spending was off 0.5 percent in the previous month. The propensity to consume was 44.5 percent - down 2.5 points on year.
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