Japanese production suffers record fall -- country continues to spiral

Japanese factory output suffered a record decline in March as the devastating tsunami crippled supply chains across the world's third-largest economy.

The government said production plummeted 15.3 per cent in March from February, the biggest decline since records began in 1953, and worse than analysts had expected. Household spending dropped 8.5 per cent from a year earlier.

Kaoru Yosano, the economy minister, described the production figure as a "stunning statistic", according to the Nikkei newspaper.

But Mr Yosano said the supply chain recovery -- "a matter of life and death" -- would be faster than expected because companies were "working day and night" to recover.

In an interview with the Financial Times after the March 11 magnitude 9 earthquake, Mr Yosano had predicted that the disaster would barely impact Japan's economy.

The earthquake and ensuing tsunami devastated large parts of northeastern Japan, destroying factories and warehouses and disrupting industrial supply chains.

Toyota recently said restoring its global production volume to normal levels would take eight months. The automaker, which is having difficulty sourcing about 150 different parts, said domestic production in March plunged 63 per cent from a year earlier.

While areas directly affected by the disaster suffered a 31.9 per cent drop in industrial production in March, the overall decline also reflected a 13.5 per cent drop in other parts of Japan, which were indirectly affected by the crisis, the government said. (read more)