Japanese industrial output plunged a record 8.5% in November from the previous month as companies scaled back to cope with the recession, the government said today.
The slump was even bigger than an initial estimate for a drop of 8.1%, and was the biggest fall since comparable records began in 1953. Compared with a year earlier, output was down 16.6%, the Ministry of Economy, Trade and Industry said.
Japanese companies have invested heavily in expanding their production facilities in recent years to meet brisk demand, helping drive a recovery in Japan's economy from recession in the 1990s.
But with consumers tightening their belts worldwide amid a wave of layoffs, many firms - particularly carmakers - are now reducing their output to avoid being left with a glut of unsold products.
The recent strength of the yen is also a major headache for Japanese companies, whose overseas earnings are suffering as a result.
Japanese Prime Minister Taro Aso, however, played down worries bout the currency's rise, which he noted had contributed to lower oil prices. He also said that Japan's banks and carmakers are in better shape than their US peers.
Japanese companies have laid off thousands of people, mostly temporary workers, in recent months in response to the country's deepening economic woes.
